The Treasury is ready to come forward with a package of measures to stabilise the housing market, but no action is expected until the autumn.
A Treasury-commissioned report by Sir James Crosby, the former HBOS chief executive, is set to be published this week but officials have indicated that it will be only an assessment of the situation.
Treasury officials have indicated their willingness to consider a range of options to deal with the crisis, including a stamp-duty holiday and action to help kickstart the market in new mortgage-backed securities. They have also said that they are cautious about acting too quickly, for fear of getting it wrong. Officials cite early pressure from the industry for the setting up of US-style government-sponsored mortgage guarantee bodies.
The problems of Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation) have killed off such ideas.