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AMI produces blueprint for solving the crunch
25 April 2008 10:30
The Association of Mortgage Intermediaries (AMI) has formulated its own proposals for overcoming the credit crunch, demanding 'outside intervention' in the sector.
Earlier this week, the Bank of England (BoE) announced that it would seek to improve the availability of mortgage finance by enabling lenders to exchange risky debt for more secure government bonds, with an initial injection of £50 billion.
Yet the AMI has described this action as both overdue and insufficient, arguing that the BoE should have added the caveat that the funds released must be used to benefit borrowers, as well as introducing longer-term measures for increasing liquidity.
It also called for carefully selected sovereign wealth funds be approached about investing in the mortgage sector and for the barriers preventing pension funds and life offices, who used to invest in mortgage-backed securities, from doing so now to be removed.
AMI director general Chris Cummings warned that the mortgage sector was no longer in a position to deal with this crisis alone and that, without the external intervention it had recommended, the number of products available to borrowers will continue to decrease.
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