The UK is a country with a state religion: the housing market. One of its former high priests, Sir James Crosby, a former chief executive of the mortgage bank HBOS, has delivered a report on how to reform the mortgage market. His main proposal aims to prevent a necessary downward adjustment in house prices from turning into a collapse. The plan is well-designed but its objective is doubtful, and it risks distracting the UK government from more important objectives.

The most significant measure suggested in the Crosby report is that the government should sell £100bn of guarantees on mortgage-backed securities for new mortgages issued over the next two years. Should any of the guarantees be called on, however, the government would charge the mortgage lender for the expense.