AMI warns on lending threat from Govt action

In its Quarterly Economic Bulletin examining the economy, housing and mortgage markets, AMI says the withdrawal of the Government's Special Liquidity Scheme in April 2011 will have a serious effect on lending. It said the end of the Government's support will leave the banking sector with short-term liquidity problems and needing to find £800bn for refinancing in the next 18 months. Of this, £200bn is owed to the Bank of England via the Special Liquidity Scheme, in which the Bank swapped prime banking assets for Treasury bills. The Government's measures to reduce the country's defic...