General Bank of England bailout to keep the wolves at bay (won't be good for Sterling
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http://www.reuters.com/article/marketsNews/idUSL169544420080416 BoE close to terms for mortgage intervention - FT
LONDON (Reuters) - The Bank of England is close to finalising the terms for an intervention in the mortgage market, the Financial Times reported, after leading bankers warned the government on Tuesday over the growing strain on small lenders.
Citing people familiar with the proposal -- which still needs government approval -- the paper said on Wednesday that the plan would see the Bank would swap UK mortgage-backed securities for government loans for a period of one to three years.
The newspaper said the Bank would not accept mortgages agreeed after the end of December 2007.
The Wall Street Journal meanwhile reported the UK government could be shifting to a more activist role in lending a hand to the sector worst hit by the credit crunch, and said it could ask the Bank of England to relax the terms of loans it makes to banks.
The newspaper said Prime Minister Gordon Brown, at the meeting with bankers on Tuesday, indicated he favoured widening the range of collateral the Bank would accept on a variety of loans.
This would be done on the condition that banks pass on the benefits to customers by easing mortgage terms and rates, the Wall Street Journal reported.