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King: Don't demonise bankers

The outgoing Bank of England governor Sir Mervyn King has warned against "demonising" bankers over the financial crash, arguing there was a failure in the system. He also said that the government's Help to Buy scheme must not become permanent.

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No room for 'US-style guaranteed mortgages' says King

Sir Mervyn's concerns about Help to Buy echo those of the Treasury Select Committee, which reported on the Budget last month.

The committee warned the Government will come under "immense" pressure to extend Help to Buy in three years time.

We do not want what the United States have, which is a government-guaranteed mortgage market, and they are desperately trying to find a way out of that position.

So, we mustn't let this scheme turn into a permanent scheme. Now when is the right time to terminate it will depend on economic conditions at the time."Sir Mervyn said the economy was in a "modest recovery" but "we certainly can't be satisfied with it".

We will need to do more to use up the spare capacity, and to get back to a healthy, growing economy," he said. "But we are in a recovery period now, I think, yes.

– The outgoing governor of the Bank of England Sir Mervyn King.

Under the equity loan new or existing homeowners will need to raise a deposit of 5% of the value of the property they want to buy, but can borrow up to a further 20% from the Government on an interest-free basis.

The biggest loan available will be £120,000.

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