CML: breakup of banks won't lead to more lending

MORTGAGE lenders have warned that the government&rsquo;s banks breakup will fail to stimulate lending and even predict &ldquo;stagnation&rdquo; in the housing market next year.<br /><br />The Council of Mortgage Lenders (CML) poured cold water on hopes that the carve up of RBS and Lloyds and the resurrection of brands like Williams &amp; Glyn&rsquo;s and Trustee Savings Bank, as well as the sale of Northern Rock, would re-ignite fierce competition. <br /><br />&ldquo;Too often, the government has failed to acknowledge the constraints under which lenders are operating &ndash; and the often conflicting demands that are being made of them,&rdquo; the CML said. &ldquo;But we expect the pent-up demand that exists in the market to help ensure that mortgage lending commitments are met.&rdquo;<br /><br />The CML reminded Alistair Darling that his goal in splitting the nationalised banks was to &ldquo;increase diversity and competition&rdquo; in banking.<br />