AMI welcomes Bank of England's Financial Stability Report

The Association of Mortgage Intermediaries (AMI) has responded to the publication of the Bank of England's Financial Stability Report.

Chris Cummings, Director General of AMI, commented: "We welcome today's publication of the Bank of England's Financial Stability Report, which states that the correction in the credit markets has gone too far and that risk appetite will return in the coming months.

"We are calling on lenders to reappraise their current positions and start lending to each other once again to unblock the market so that consumers may benefit from improved access to credit.

"AMI also calls on lenders to urgently return to a 'level playing field' in terms of product pricing, recognising that consumers want access to mortgage advice. Products should be priced to respond to this demand, bringing an end to the artificial barriers to the access of advice through measures such as raising rates on intermediary business."

Drawing on themes set out in AMI's White Paper on 'solutions to the credit market's turmoil', the Bank of England has identified that some Mortgage Backed Securities (MBS) now 'look cheap'. The Bank thinks there will be no defaults of triple A rated securities, making these good investments - and causing banks to make unnecessary losses based on market-to-market accounting.

Cummings continued: "It is AMI's view that the Bank should step in and buy more of these assets, and work with the industry to set a new 'Gold Standard' against which MBS could be re-priced."

In the White Paper AMI advanced a set of solutions to the credit crisis and further meetings are now being held with Bank of England officials and policy makers in order to offer further advice and address the issues in the market.