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Chancellor launches Mortgage Finance Working Group

publication date: Apr 1, 2009
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Sir James Crosby will lead a group of mortgage industry experts, providing advice to the Government on options for improving the function of mortgage finance markets, the Chancellor of the Exchequer, Alistair Darling has announced. 

The Working Group will draw on the experience and expertise of lenders, investors and the Tripartite Authorities (the Treasury; the Bank of England; and the Financial Services Authority. 

The establishment of the Working Group follows the publication of the Treasury’s Housing Finance Review alongside Budget 2008. The Working Group will consider options for improving the mortgage-backed securities market, including measures aimed at broadening the investor base for mortgage-backed securities and improving the robustness of the market. Its first task will be a broad-based assessment of the current state of the mortgage finance market. 

The Chancellor said: “The recent and ongoing disruption in global financial markets has raised complex issues about the functioning of the mortgage-backed securities markets. I am delighted to announce that Sir James will chair the industry Working Group that will consider market-led initiatives to improve these markets. This work will be an important contribution to stabilising the cost and supply of UK mortgages”. 

Sir James Crosby said: “I am very pleased to be playing a part in this work. These difficulties stem from problems in the markets, so to be effective any proposals to deal with them must be market-developed and market-led. 

Our job in this group will be to facilitate a discussion between lenders, investors and the authorities with a view to identifying market-led solutions that will work”. 

The Group will present an interim report to the Chancellor later this summer and a final report at the time of the 2008 Pre-Budget Report. The Housing Finance Review reported at Budget 2008. It identified two key challenges for the UK mortgage market: 

  • The recent and ongoing disruption in financial markets.
  • The lack of longer-term fixed rate mortgages in the UK 

The terms of reference for the Working Group are to consider initiatives to improve the mortgage-backed securities market as a stable source of mortgage finance over the medium and longer term. These may include measures aimed at broadening the investor base for mortgage-backed securities and improving the robustness of the market. 

Sir James Crosby is currently a Director of ITV plc and Compass Group plc, and a trustee of Cancer Research (UK). In 30 years in the financial sector, he has worked in the investment, insurance and banking businesses, most recently as Chief Executive of HBOS. He also serves on the Financial Services Authority Board as Deputy Chairman.