House of Lords written question – answered at on 22 October 2013.
To ask Her Majesty’s Government whether the Financial Policy Committee of the Bank of England has been or will be given the authority to set or recommend maximum loan-to-value and loan-to-income levels for bank lending secured on residential or commercial property.
The Government has established the independent Financial Policy Committee (FPC) to monitor the stability of the financial system as a whole with a view to ensuring that emerging risks and vulnerabilities are identified and effectively addressed. This includes monitoring developments in the housing market.
The Government has given the FPC two sets of powers to help it mitigate risks to financial stability. The first is a broad power to make Recommendations to regulators on a comply-or-explain basis, the second set of powers is to give Directions to regulators to adjust specific macro-prudential tools.
As the FPC noted in the record of its meeting of
The FPC also has the power to make Recommendations to HM Treasury with regards to the tools it would like to have powers of Direction over. It has not requested a power of direction to set maximum loan-to-value or loan-to-income ratios.
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