I still prefer Milton Friedman's idea, popularised by Ben Bernanke, of dropping money out of a helicopter
(as long as I am downwind nearby)
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Previously on "Bank reveals firms signed up to Funding for Lending scheme"
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Originally posted by Martin@AS Financial View PostAldemore, Barclays, Hinckley & Rugby BS, Ipswich BS, Kleinwort Benson, Leeds BS, Lloyds Banking Group, Monmouthshire BS, Nationwide BS, Principality BS, RBS Group, Santander and Virgin Money have all been confirmed as participants in the scheme.
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How about the government do not interfere and let the market sort itself out ? I wonder what the vested interest is in ensuring an artifically high house price is in place.
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Originally posted by DodgyAgent View Post
The government lends the money to the banks at 0%.
The government then borrows the money from the banks at 10%
The banks swap loans the loans as assets thus creating liquidity .
Tax payers can then borrow from the banks to pay taxes.
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Originally posted by sasguru View PostNot quite. This is QE (printed) money that they're trying to push into the real economy.
Interesting to note that the government has no better strategy long term.
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"Fisher says: “The Bank cannot give details of an individual firm’s previous or new lending plans. It is for each of them to explain how the FLS enables them to support the economy. Most have already announced reductions in some interest rates or a loosening of other terms and conditions. Some will respond by lending to firms that they would previously not, because they can now earn a return that compensates for the extra risk. All these approaches will help.”
Wasn't that the mitigation for putting all their eggs in the US property scam?
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Originally posted by Pondlife View PostThe government is taking your money and lending it to banks at 0.25% so that they can in return lend it to you at 5%.
or something.
Interesting to note that the government has no better strategy long term.
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Originally posted by Pondlife View PostThe government is taking your money and lending it to banks at 0.25% so that they can in return lend it to you at 5%.
or something.
Thanks for explaining it in the way the plebs can understand it.
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Originally posted by Martin@AS Financial View PostThe funding for lending scheme is the latest iniative to kick start the market by the BOE. Whilst this has led to some fantastic rates, lenders need to start designing higher LTV products to help those who need it most - ie first time buyers.
(Taken from Mortgage Strategy)
Thirteen financial institutions accounting for around 73 per cent of UK lending have signed up to the Funding for Lending Scheme, according to the Bank of England today.
The Bank’s Monetary Policy Committee Member Paul Fisher today released information on the current participants of the scheme which allows banks and building societies to exchange existing loans for Treasury bills, on which they will pay an interest rate of 0.25 per cent over the next 18 months.
Aldemore, Barclays, Hinckley & Rugby BS, Ipswich BS, Kleinwort Benson, Leeds BS, Lloyds Banking Group, Monmouthshire BS, Nationwide BS, Principality BS, RBS Group, Santander and Virgin Money have all been confirmed as participants in the scheme.
The BoE has released details of all participants’ base stock of loans as of June 30 to serve as a benchmark for measuring the scheme’s success.
Fisher says: “The Bank cannot give details of an individual firm’s previous or new lending plans. It is for each of them to explain how the FLS enables them to support the economy. Most have already announced reductions in some interest rates or a loosening of other terms and conditions. Some will respond by lending to firms that they would previously not, because they can now earn a return that compensates for the extra risk. All these approaches will help.”
“We cannot expect every bank in the FLS to increase its stock of lending to the real economy over the 18-month [drawdown] period … the crucial impact will be whether the FLS enables them to lend more than they would have done in its absence”.
Fisher adds that the hope is for new entrants to step in and pick up where the major banks cannot.
Average mortgage rates have started to come down in the weeks since the launch of the Funding for Lending scheme. Figures compiled by Moneyfacts.co.uk for Mortgage Strategy show that average rates on five-year fixed mortgages at 60 per cent LTV have fallen the furthest, down from 4.35 per cent in June to 3.79 per cent yesterday.
There has been minor decline in nearly all higher LTV fixed rates except for at 100 per cent which remains unchanged at 5.98 per cent and at 80 per cent LTV. At 95 per cent LTV, average rates are 0.09 per cent lower than at the beginning of June and currently stand at 5.61 per cent.
As in August, average fixed rates at 80 per cent LTV are currently higher than for the start of June and stand at 4.71 per cent compared with 4.59 per cent for June 1. This is believed to be due to more lenders having introduced new variable products at 60 per cent to the market.
Cuts to fixed rates on 75 per cent LTV mortgages have gained the most ground in recent weeks. Rates had dropped by 0.16 per cent between June 1 and August 10, to 4.45 per cent but had fallen a further 0.22 per cent to 4.23 per cent by September 24.
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Bank reveals firms signed up to Funding for Lending scheme
The funding for lending scheme is the latest iniative to kick start the market by the BOE. Whilst this has led to some fantastic rates, lenders need to start designing higher LTV products to help those who need it most - ie first time buyers.
(Taken from Mortgage Strategy)
Thirteen financial institutions accounting for around 73 per cent of UK lending have signed up to the Funding for Lending Scheme, according to the Bank of England today.
The Bank’s Monetary Policy Committee Member Paul Fisher today released information on the current participants of the scheme which allows banks and building societies to exchange existing loans for Treasury bills, on which they will pay an interest rate of 0.25 per cent over the next 18 months.
Aldemore, Barclays, Hinckley & Rugby BS, Ipswich BS, Kleinwort Benson, Leeds BS, Lloyds Banking Group, Monmouthshire BS, Nationwide BS, Principality BS, RBS Group, Santander and Virgin Money have all been confirmed as participants in the scheme.
The BoE has released details of all participants’ base stock of loans as of June 30 to serve as a benchmark for measuring the scheme’s success.
Fisher says: “The Bank cannot give details of an individual firm’s previous or new lending plans. It is for each of them to explain how the FLS enables them to support the economy. Most have already announced reductions in some interest rates or a loosening of other terms and conditions. Some will respond by lending to firms that they would previously not, because they can now earn a return that compensates for the extra risk. All these approaches will help.”
“We cannot expect every bank in the FLS to increase its stock of lending to the real economy over the 18-month [drawdown] period … the crucial impact will be whether the FLS enables them to lend more than they would have done in its absence”.
Fisher adds that the hope is for new entrants to step in and pick up where the major banks cannot.
Average mortgage rates have started to come down in the weeks since the launch of the Funding for Lending scheme. Figures compiled by Moneyfacts.co.uk for Mortgage Strategy show that average rates on five-year fixed mortgages at 60 per cent LTV have fallen the furthest, down from 4.35 per cent in June to 3.79 per cent yesterday.
There has been minor decline in nearly all higher LTV fixed rates except for at 100 per cent which remains unchanged at 5.98 per cent and at 80 per cent LTV. At 95 per cent LTV, average rates are 0.09 per cent lower than at the beginning of June and currently stand at 5.61 per cent.
As in August, average fixed rates at 80 per cent LTV are currently higher than for the start of June and stand at 4.71 per cent compared with 4.59 per cent for June 1. This is believed to be due to more lenders having introduced new variable products at 60 per cent to the market.
Cuts to fixed rates on 75 per cent LTV mortgages have gained the most ground in recent weeks. Rates had dropped by 0.16 per cent between June 1 and August 10, to 4.45 per cent but had fallen a further 0.22 per cent to 4.23 per cent by September 24.Tags: None
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