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FSA wants new credit controls

BRITAIN’S top financial regulator yesterday called for fresh powers to control the availability of credit and ward off future asset price bubbles.

“We need a new set of macro-prudential tools – not just interest rates – to address the quantity of credit,” said Lord Turner, chairman of the Financial Services Authority. He will set out details in a lecture in March.

To rein in excessive lending banks should face higher capital requirements, he said. Borrowers should face limits on loan-to-value ratios, preventing them from borrowing when asset prices rise too far.