Assetz For Investors News
Tue, 29 Jul 2008 17:00:53 BST
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Crosby Report: Too Little Too Late
Stuart Law, Managing Director of property investment specialist Assetz comments on the release of the Crosby Report:
"The Crosby report it is too little too late and reaches no useful conclusions whatsoever. It does not even give any suggestion of the viability or otherwise of Government intervention and purposefully leaves this decision open.
"Now is not the time for procrastination. All the relevant parties must now act before the autumn to reopen the mortgage securitisation market - albeit with the majority of the responsibility and risk left with the lenders.
"A special liquidity scheme that applies to all the mortgage securitisation must be extended immediately to new mortgages being issued, as an essential kick-start to the mortgage securitisation market. Such action will increase confidence and allow the market itself to rebuild over time, allowing this Government intervention to cease in due course again.
"The banks have suffered substantial losses from their foolhardy investment in the US sub prime securitisation markets and the shareholders have paid and will pay for this through share price reductions, greater liquidity requirements for the banks and rights issues. Unfortunately these losses are preventing lending to credit worthy people in the UK on reasonable terms.
"Government intervention will not be restarting a credit boom but preventing a credit crisis, which will cause a meltdown of the UK economy if no immediate action is taken."
