The United Kingdom's Chancellor of the Exchequer, George Osborne, said regulators there are considering regulating loan-to-value ratios in mortgage lending.
“We are seeking to give the Financial Policy Committee the tools to help to dampen down a credit boom or to help in a credit crunch,” Osborne said in the transcript from the second reading of a financial services bill late Monday. “It will be able to alter the maximum loan-to-value ratios in mortgage lending in order to curb an unsustainable rise in house prices.
It will also be able to do the reverse, should we face unwanted house price deflation. It will also, potentially, be able to alter capital requirements for banks, in a counter-cyclical way.
“I should say that these are just possibilities; they are potential tools that the committee might want to use,” he stressed.
