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SELL YOUR HOME QUICKLYBank of England steps in, no reverse to credit crunch impact
The Bank of England has taken a step forward in trying to relieve the effects of the credit crunch on the banking system. The bank announced today that it will exchange government bonds for a range of high quality bank assets, including mortgages.
This move was made in order to free up bank balance sheets. This means companies will be able to lend more to consumers who are struggling with falling house prices, fewer home loan products, and skyrocketing oil and food prices.
However, this exchange doesn’t come without a price, as government expects banks to start working on their own balance sheets.
Is this good news for homeowners and first-time home buyers?
Analysts believe that although the BoE plan could potentially improve general sentiment, it will do nothing to ease the impact of the credit crunch.
Reuters.co.uk quotes BNP Paribas economist, Alan Clarke, as saying, “The plan will not undo the harm that has already been done to the economy, but it might stop things getting any worse.”