18 Mar

FSA proposes banking changes

FSA proposes banking changes

A range of new rules and regulations for the banking industry have been proposed by the Financial Services Authority (FSA), which may help prevent a repeat of the credit crunch.

The review of global banking regulations by FSA chairman Lord Turner included recommendations that financial institutions should have larger amounts and a better quality of capital to back their transactions, while liquidity should also be regulated more tightly.

In its response to the review, the Building Societies Association (BSA) stated: "It is appropriate that the FSA should be focusing on liquidity and capital requirements and we urge the FSA to concentrate its efforts on those areas of greatest systemic risk."

The BSA also said the FSA was right to have "identified the drawbacks" of regulating mortgage products.

Such a view was echoed by the Council of Mortgage Lenders, which stated it is looking forward to the FSA's review of mortgage regulation being published in September.

It commented that this may provide an opportunity to produce a regulatory framework to suit both lenders and consumers.

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