Calls for Bank of England to extend support for loan providers

9 February 2010

The Bank of England is coming under increasing pressure to extend its £300bn of emergency support under the Special Liquidity Scheme, according to Thisismoney.co.uk.

The scheme, which was aimed at increasing the funds available to financial institutions, helping them offer loans, enabled banks and building societies to swap `unwanted` debts for more secure Government debts, thus increasing their `liquidity`.

But some banks and building societies are concerned about their ability to offer loans in the future.

The Council of Mortgage Lenders believes that the price of loans and other forms of credit could rise if the Bank of England insists that financial institutions repay their taxpayer loans too quickly, Thisismoney.co.uk reports. Extending the scheme would be a possible solution to this.

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