View more on these topics

Ward: FLS is hitting new RMBS issuance

 

The Funding for Lending scheme is causing a lack of new issuances in the residential mortgage-backed securitisation market and should not be extended beyond its January 2014 end date, according to Home Funding chief executive Tony Ward. 

The last major RMBS was Virgin Money’s £2.6bn issuance in November, three months after the Funding for Lending scheme came into force.

Ward says the scheme has created an alternative funding source for lenders, making the RMBS market “very quiet”.

He says: “No one is going to the debt markets when they have the funding for lending scheme to fall back on right now.

“The FLS is due to be withdrawn in January 2014 and I would quite like it to be withdrawn because we need to get the debt markets functioning again and cannot be forever relying on Government bailouts.”

Clifford Chance partner Emma Matebalavu says: “There have been fewer new issuances this year and the FLS is a factor but I do not think it is the only reason.

“Last year there was a lot of issuance and a lot of institutions filled their funding requirements, especially as some banks are also shrinking their balance sheets, reducing their funding need. Others are also diversifying between wholesale and retail funding.”

A Council of Mortgage Lenders spokesman says: “Lenders have a range of funding options through retail deposits and funding for lending now coming into the mix. It creates an option that did not exist before last summer.”

Recommended

Ian-Gorham-MM-Grey-250x255.jpg
24

Hargreaves Lansdown chief: Did we hear someone suggest price fixing?

I have been amazed to see recent suggestions that the future price of fund management should be fixed, with the same annual management charge on commission free funds paid by all platforms and distributors.  Fund management companies are commercial suppliers of a service and therefore in competition.   Any suggestion that an industry should ignore […]

Chancellor set to extend Funding for Lending scheme

Chancellor George Osborne is expected to announce an extension to the Funding for Lending scheme in the coming weeks, according to reports. The BBC reports an extension to the £80bn scheme, which is currently set to expire in January 2014, may be announced ahead of the International Monetary Fund’s commencement of annual government consultations next […]

IFA verdict: Schroders reveals replacements for Buxton and Francis

Advisers are split on the replacement for Schroder’s star manager Richard Buxton and Errol Francis, with some seeing similarities between the manager’s styles and performance but others doubtful that this will stop outflows following Buxton. Jupiter’s Philip Matthews and Alex Breese from Neptune are set to take over the running of the UK equity funds […]

Neil Woodford: Deleveraging of banks in Europe is ‘5 years behind US’

Invesco Perpetual fund manager Neil Woodford believes Europe’s deleveraging process for banks is “five years behind the US” and will inevitably stall economic growth in the region. In the April update for the Edinburgh Investment Trust, Woodford argues Europe is lagging behind the US having just begun the process of deleveraging. He says: “The process […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com