Loans -
Bank seeks to ease liquidity woes - 12/03/2008
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The Bank of England has sought to ease the ongoing liquidity squeeze gripping the financial markets.
Banks are nervous about lending to one another in the current climate, so Britain's central bank has made a £10 billion pot available for three-month loans.
It is hoped that the move will make it easier for banks to raise capital, which should in turn make it easier for individual borrowers to access loans.
The move has been welcomed by Richard Farr, director of the Association of Mortgage Intermediaries (AMI).
"Although not a long term solution to the liquidity crisis we agree with the Bank's view that the 'continuing elevated pressures in short-term funding markets' are very real, are causing significant pain to the lending industry and are having a subsequent knock on effect in the housing market," he added.
Mortgage customers especially have seen rates rise and tighter restrictions imposed since the collapse of the sub-prime market in the US last year.
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