SLS receives CML support

Posted: 01 May 2008 12:23:58 GMT

The Bank of England's Special Liquidity Scheme (SLS) has received support from the Council of Mortgage Lender.

The Bank of England's Special Liquidity Scheme (SLS) has received support from the Council of Mortgage Lender.

CML director general Michael Coogan said at a Debt and Personal Finance All Party Parliamentary Group meeting that he is hopeful SLS will prove successful.

The idea of the scheme is to ease the credit crisis by allowing banks to swap potentially unsafe mortgage assets for UK Treasury Bills.

Initially, £50 billion worth of bills will be made available and the CML is confident that they will prove popular and more will eventually be made available.

"If it is used widely, as I expect it to be, and extends to over £50 billion in asset swaps by banks and building societies, we think that some of that money will be recycled responsibly into the mortgage market," commented Mr Coogan.

On the subject of the credit crunch, the director general said that all borrowers "will be affected in some way".

However, he also pointed out that people are so far coping very well.

"Contrary to popular belief, customers coming out of fixed rates in 2007 and 2008 appear to be managing the adjustment well so far," added Mr Coogan.

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