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Bank of England resists car finance access to funding

Written By Faye Sunderland Published On: Jan 30 2009
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The governor of the Bank of England, Mervyn King has ‘rebuffed’ Lord Mandelson’s proposal to allow finance arms of carmakers to access a ‘special liquidity scheme’, the Financial Times reported yesterday.The scheme would have allowed banks to convert illiquid assets of car manufacturers into cash.Business Secretary, Lord Mandelson is still reportedly determined to gain support for the finance arms, having recently announced 2.5bn worth of support for the car industry.Further meetings are to be held between the Department for Business, Enterprise and Regulatory Reform (BERR) and car manufacturers to discuss possible options to secure support for car finance.The Treasury is believed to have some reservations on the benefit to the taxpayer for helping to fund car purchases, not least as many new cars bought in the UK are imports.

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