Bank of England Asks Government for New Powers Over Housing

purch

ManAtHome wrote: »

Presumably in a "after the event" kinda way?

The Bank is now trying to sort out the mess left behind by the previous Governments "light touch" approach to the regulation of the Banking system.

They now have been given back some of the powers, controls and oversight that was taken away from them.

Should the Bank have been warning the Government of the dangers they may or may not have seen in the run up to 2007 ?.

We won't know exactly what was said for a few years yet, but certainly in public the Bank were too quiet.

purch

Bantex wrote: »

Is part of it's job to control over indebtedness?

No......................

officeuk

Yes but if everything is on the up, why doe BOE need these powres?

purch

officeuk wrote: »

Yes but if everything is on the up, why doe BOE need these powres?

If you visit your GP, they might be able to prescribe you Prozac or something similar.

officeuk

I am gp. And i would prescribe something alot stronger for most of you!

purch

Graham_Devon wrote: »

Reading between the lines, it appears there may be an issue with banks doing what the BOE are asking.

If you actually read between the lines of the Banks official release, you may get a better feel for what is happening.

First of all this emanated from HM Treasury who asked the Bank to look into what additional powers it might need.

Secondly, these additional powers are requested in order to deal with events that might happen in the future, not to address any current concerns.

The FPC therefore discussed this at its meeting on 26 September and is announcing today its recommendation to HM Treasury on the form of these powers:

The FPC recommends that HM Treasury exercise its statutory power to enable the FPC to direct, if necessary to protect and enhance financial stability, the PRA and FCA to require regulated lenders to place limits on residential mortgage lending, both owner-occupied and buy-to-let, by reference to:
a) Loan-to-Value Ratios;
b) Debt-to-Income Ratios, including Interest Coverage Ratios in respect of buy-to-let lending.

These instruments would sit alongside the FPC’s power of Direction on sectoral capital requirements and its responsibility for setting the countercyclical capital buffer (CCB) rate, and complement the FPC’s existing powers of Recommendation. The FPC judges that, taken together, these instruments are necessary, and should be sufficient, to tackle risks to financial stability that could emerge from the housing market in the future, rather than indicating likely FPC policy decisions in the short term.

http://www.bankofengland.co.uk//publications/Pages/news/2014/080.aspx

Generali

officeuk wrote: »

Yes but if everything is on the up, why doe BOE need these powres?

As the old saying has it, you fix the roof while the sun ahines.

System

purch wrote: »

We won't know exactly what was said for a few years yet, but certainly in public the Bank were too quiet.

Remember the days when if he was really really really concerned, the Governor would write his famous "letter" to the Chancellor, and then everything would be well again?

Thrugelmir

officeuk wrote: »

Economy back on track.

To where? Drill into the detail and it is far from fixed.

officeuk

I was being sarcastic.