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PBR: Government to guarantee mortgage securities with EU permission

The Government has revealed it will take on board the long-awaited Crosby report’s proposals to guarantee mortgage-backed securities.

Darling says: “Today I welcome the publication of Sir James Crosby’s report and its principle recommendation today is that Government support for the mortgage market should be by providing, for a temporary period, guarantees for securities backed by new mortgages.”

Darling says he shares Crosby’s concerns of the availability of mortgage finance and to implement his recommendation the Government would need to obtain state-aid approval from the European Commission.

He says: “We will resolve some of the technical and practical considerations, but we will work out a detailed scheme based on his recommendations and seek state approval to proceed.”

Darling says he is also setting out a new body, a lending panel that will monitor lending to both small businesses and households – it will bring together the Tripartite, consumer groups and the mortgage industry to make sure lending continues.

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