16th Dec 2015 07:14
LONDON (Alliance News) - The City's most powerful regulator has said that British authorities will challenge new international proposals that could force so-called challenger banks to hold more capital to support their residential mortgage lending, Sky News reported on Tuesday.
The report cited a letter sent by Andrew Bailey, the chief executive of the Bank of England's Prudential Regulation Authority, to a group of smaller lenders, in which he sought to provide reassurance over a consultation paper published by international banking regulators last week.
The Basel Committee, which is responsible for banking supervision, raised the prospect that lenders may be forced to hold more capital against buy-to-let loans. The consultation hit shares in specialist lenders such as Aldermore Group and OneSavings Bank.
The Bank of England is already considering use of its powers to ensure the buy-to-let market does not get out of control.
http://news.sky.com/story/1606443/dont-panic-pra-boss-tells-challenger-banks
Separately, Mark Carney, the governor of the Bank of England, told the Financial Times of his concerns about high levels of lending in the buy-to-let market.
According to Tuesday's report, Carney is mindful of the risk that investors could all seek to sell simultaneously in the event of a general decline in house prices.
"So we do have to be careful around that [buy-to-let] sector. And I think collectively there are a number of things happening and we are watching it, we are watching it closely and we will take action," Carney told the newspaper.
http://www.ft.com/cms/s/0/6843791c-a325-11e5-bc70-7ff6d4fd203a.html#axzz3uSoD3rtj
By Samuel Agini; [email protected]; @samuelagini
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