28 Oct

Bank advocates new stabilisation reform

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.

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