Back in the fall of 2005, the Federal Reserve, U.S. Treasury and the Federal Deposit Insurance Corporation (FDIC) realized that community banks were loaning funds to the housing and real estate markets at a pace above what these regulators thought as prudent.

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Stresses in housing markets impose another constraint on lending: that may be why Sheila Bair, head of the Federal Deposit Insurance Corporation, an American bank regulator, broke ranks with her government and criticised the rescue plan for not addressing foreclosures.

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Housing Minister, Deputy Andrew Green, said about 100 people could benefit and would borrow 15% of their deposit on an interest free basis from the States.

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