America offers the best and worst of everything. Last year it gave us the credit crunch and last week it demonstrated how to mitigate some of the consequences.

The speed with which the US authorities dealt with the potential collapse of Fannie Mae and Freddie Mac, the country's two huge mortgage financiers, was a lesson in crisis management that ministers on this side of the Atlantic would do well to learn. Admittedly, a failure to shore up these two institutions could have led to a financial meltdown to rival the Great Depression, but the speed of the US authorities' response was impressive.

While the problems in the UK mortgage market are not quite as pressing, they are becoming increasingly urgent. One has to wonder how much more damage the housing market and wider economy must take before the Government takes stronger action to address the causes of the credit crunch.

This week, in exasperation at the status quo, the Council of Mortgage Lenders (CML) published its proposals to open up the market in mortgage-backed securities, which has effectively shut down since the credit crunch began, causing lending to fall by 60 per cent in a year. Originally, the CML had submitted these proposals to Sir James Crosby, the former chief executive of HBOS, who is conducting a Treasury-sponsored review of mortgage finance. It decided to go public after reports that Sir James's interim report, which is due to be published next week, will merely outline the various problems without offering any solutions.

Lenders, although partly responsible for getting us into this mess in the first place, do have a point. Everybody already knows what the problem is. It has been apparent for rather a long time now. What is required, and urgently, is serious action, not another review, committee, debate or endless pen-pushing.

If Gordon Brown and Alistair Darling have not watched the scene in Monty Python's Life of Brian, where the People's Front of Judea sit around debating whether they waste too much time debating, they really should.

Time is of the essence. A failure to act swiftly will cost the economy dear and, in all likelihood, cost Labour the next election.

Mortgage-backed securities look to be the quickest fix

It is one thing to call on the Government to act to solve the credit crunch, but what exactly should it do? Well, the CML's proposals look as credible a remedy as any.

The CML wants the Bank of England to allow investors in mortgage-backed securities, which lenders use to finance home loans, to exchange these bonds for more secure government gilts should they need to. This would, in effect, be an extension of the existing £50 billion special liquidity scheme announced in April. The CML argues that allowing new investors in these securities to exchange them for gilts will encourage new investment, which will, in turn, provide the extra capital required for more and cheaper home loans.

The plans make sense because there is a latent and untapped demand for loans from creditworthy borrowers and the quickest way to restore the mortgage market is to revive mortgage-backed securities. Other proposals to remedy the credit crunch, such as creating a public company to offer mortgages, will take months to come to fruition, by which time it could be too late, if it is not already.

Detractors of the CML proposal suggest that it will simply encourage more reckless lending, but that need not be the case. The Bank of England could insist that it would accept mortgage-backed securities as collateral only where the maximum loan-to-value ratio were 95 per cent.

There is also a widespread misconception that the policy would use taxpayers' money to subsidise the banks. Actually, financial institutions would pay a heavy price - known as a haircut - if they wanted to swap their mortgage-backed assets. The haircut is a discount on the face value of the assets being exchanged. Yes, there is some theoretical risk transferred to the taxpayer, but there is no upfront cost and the very act of making available this exchange facility should bolster the mortgage and housing markets sufficiently to reduce the chance of losses. The greater risk to the taxpayer is surely a massive economic slowdown if nothing is done.

How long can banks ignore the case for overdraft overhaul?

While I may agree with the lenders' suggested remedy for the credit crunch, their collective refusal to concede any ground on the matter of overdraft charges reflects badly on the industry.

On Wednesday the Office of Fair Trading (OFT) published the results of its year-long inquiry into current accounts. The watchdog found what Times Money has argued for a while: that charges are not transparent and that the market is not competitive. The banks responded with yet another thinly veiled threat to end so-called free banking. But banking isn't free for the four million account holders who pay more than £200 a year in charges. Some of these people may be reckless, but it is clear that charges fall disproportionately on the vulnerable, those on low incomes or people with debt problems.

If you are a “good” customer who is reluctant to pay for your account, ask yourself if it is fair that banks require these people to subsidise you. If the answer is no, you must surely agree with the OFT that an overhaul of the current account market is long overdue.