Wave director of sales and distribution Mehrdad Yousefi says small lenders may have to pay a premium for wholesale funding once the market stabilises.
Yousefi predicts that small lenders will be charged 10 to 15 basis points more than lenders with big retail deposits.
He says: “There are not sufficient retail funds to fund all UK mortgages. It is fine if you have a strong balance sheet but if you are purely a mortgage bank and you cannot grow retail deposits, you may have to pay a premium for the wholesale markets.”
He says banks such as HBOS and Barclays will be considered less of a risk due to their high proportion of retail funding and diversified business.
Yousefi adds: “The funding crisis is not over yet. People need to bide their time and perhaps in early autumn it will be time to reflect about policing banks and funding guidelines.”