9
Sep
Freddie and Fannie rescue 'will boost UK liquidity'
The link between what has been happening in the US mortgage market
and the performance of the sector in the UK means the rescue by the
American government of Fannie Mae and Freddie Mac will be good news
for Britain, it has been stated.
Chief executive of property firm Badger Holdings Tony Addinall said
the sub-prime crisis had been the "catalyst" for the credit crunch
and suggested that the security provided by federal backing for the
two lenders could help improve the levels of investor confidence in
Britain by reducing the uncertainty that has existed in recent
months.
Andy Cuthbert of Badger's financial arm Dot Financial Services
added to this: "Although we are yet to see what direct impact this
action will have, it is definitely a positive step."
The action of the federal administration in buying mortgage-backed
securities may also provide a policy template for the British
government, it has been suggested.
Chris Cummings, the director general of the Association of Mortgage
Intermediaries, said such a policy should be applied in Britain as
a way of increasing liquidity.
