Andrew Clare was speaking at the company’s Fundamentals presentation which considered the problems facing the European Central Bank (ECB) in setting interest rates across the EU.
Andrew Clare said, “While the UK’s mortgage market may be in need of some minor reforms, it seems to us that it is Europe’s mortgage market that really needs attention.”
“If, in this downturn, Europe had had in place a mortgage funding arrangement that allowed mortgage holders to re-fix their mortgages at no cost as interest rates fell – a ‘Fannie Mae’ for Europe – the European economy would have responded to the ECB’s rate cuts and would probably have performed far better as a result.”
“We believe that the ECB should be taking the lead in identifying ways of making its interest rate changes more effective and more even across European regions. At the moment, when it comes to influencing European demand, the ECB is pushing on a piece of string.”
Commenting on the impact of the Miles Review for the UK, Andrew Clare said, “On the grounds of consumer choice, we believe that the removal of any factors that impede creation of longer-term mortgage lending in the UK would be no bad thing. It might also increase the supply of long-term fixed income assets for UK institutional investors.”
