28Oct
Bank advocates new stabilisation reform
The Bank of England has called for new reforms of the financial
system that may prevent another credit crunch.
In its Financial Stability Report the institution has argued that
the level of liquidity and capital banks and building societies
have as a basis for their lending should be subject to tighter
regulation.
"That means not just increasing capital and liquidity requirements
for individual institutions but relating them to the cyclical
growth of risk in the system more broadly," explained the Bank's
deputy governor for financial stability Sir John Gieve.
Such a development could add to the confidence of property
investors as they may be able to look to the future with greater
assurance that the liquidity crisis will not repeat itself.
A report out this week from the Centre for Economics and Business
Research stated that the recent government moves to increase
liquidity and capital levels will help to increase the availability
of mortgage finance in the months ahead.
