A stark warning to home buyers that mortgage lending could halve this year have prompted a pledge from Alistair Darling to do 'everything I possibly can' to restore normality to the housing market. Financial Times (Saturday)
The chancellor’s comments – which came after the warning from the Council of Mortgage Lenders – point to an increasing likelihood that the government and Bank of England are poised to announce plans to take over the risky mortgage assets that banks cannot sell – in an attempt to unblock the lending markets.
Speaking at the start of this weekend’s international gathering of ministers and central bank governors, the chancellor insisted that Britain could act without waiting for other countries as it became increasingly clear the G7 would not propose any globally co-ordinated moves to ease strains in the financial markets.
However, the G7 last night endorsed plans prepared by the Financial Stability Forum – the body charged with co-ordinating a response to the credit crisis – to force banks to hold more capital to guard against the risks that contributed to the global financial turmoil.