To ask the Chancellor of the Exchequer
(1) on what basis the eligibility of financial institutions to participate in the new guarantee scheme for residential mortgage-backed securities will be determined; and whether UK non-bank lenders will be permitted access to the scheme;
(2) what assessment he has made of the likely effects on competition in the UK mortgage market of restricting access to the new guarantee scheme for residential mortgage-backed securities to banks and building societies;
(3) pursuant to the oral statement of 19 January 2009, Official Report, columns 482-6, on financial markets, whether any schemes being developed to encourage lending to businesses and consumers will be open to UK non-bank financial institutions;
(4) whether his Department plans to develop a scheme to support new lending by UK non-bank financial institutions.
This included a guarantee scheme for asset-backed securities to help improve lenders' access to wholesale funding markets and help promote robust and stable markets in the medium term. The scheme draws on the recommendations made by Sir James Crosby and will commence in April 2009 subject to state aid approval.
UK banks and building societies (i.e. deposit takers currently eligible for the Credit Guarantee Scheme) are eligible to participate in the new scheme. The Government will work closely with the industry and keep the scope of the scheme under review. Eligible institutions will be able to access the scheme subject to fulfilling conditions that will be announced by the Debt Management Office in due course.
The Government have not, at this time, produced any assessment of the impact on competition in UK mortgages of limiting participation to deposit taking institutions. However, the measures announced on