Plans to introduce a “gold standard” for mortgage securities are to be considered this week. The Treasury will look at the proposals as part of an interim report to be submitted to Alistair Darling tomorrow.

Sir James Crosby, deputy chairman of the Financial Services Authority and formerly the chief executive of HBOS, the troubled mortgage provider, was commissioned by the Treasury to look at options for improving the mortgage-backed securities (MBS) market, which imploded last year at the onset of the credit crisis.

Mortgage-backed securities underpinned a third of all new mortgages until last year. Today, the market remains closed.

Sir James is thought to be considering the idea of a “gold standard” for mortgage-backed securities as a way of encouraging a broader stable of investors to buy the assets, although details of the scheme were unclear last night. Treasury sources said that another option being considered was for the Bank of England to accept as securities new mortgages that have been written since the credit crunch.

The Bank threw the troubled mortgage market a lifeline this year by agreeing to swap mortgage securities, issued until October 2006, for Treasury bills that could then be used in the market as a way of raising new funds.

However, the solution dealt only with the overhang of assets and did not provide a kickstart to get the market moving in future. Last night Treasury sources emphasised, however, that any such intervention would be a “temporary measure” only. The sources said that Sir James had been asked to find other sources of financing as well as improve the robustness and transparency of the overall market. A full set of proposals for the mortgage market will be delivered in the Pre-Budget Report later in the year.

Despite spending months consulting with mortgage industry experts, including banks, building societies and other specialist lenders, Sir James is expected to tell the Chancellor that “no clear consensus” has emerged on how best to tackle the problems in the wholesale funding markets.

When the review was launched in April, Sir James said that he wanted to find market solutions to the problem. “These difficulties stem from problems in the markets, so to be effective any proposals to deal with them must be market-developed and market-led”, he said.