In his November 2008 report into the state of UK mortgage finance, Sir James Crosby concluded that, without intervention, UK mortgage lenders would need to survive with little or no access to wholesale asset-backed funding until the end of 2010, yet during the same period would need to meet redemption obligations on such securities of £160 billion. The UK Government’s proposed solution is the 2009 Asset-Backed Securities Guarantee Scheme (the “Scheme”), which was originally announced on 19 January 2009, as part of the raft of measures introduced to support the UK financial system 1, and which became operational on 22 April 20092, following approval of the Scheme under the EU State Aid rules.

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