FSA chairman Lord Turner has recommended the tightening of commercial property finance.
Lord Turner, the chairman of the Financial Services Authority (FSA), has told the Treasury select committee that
commercial property finance should be tightened as part of the reform of the UK's banking system.
Some 80 per cent of UK credit is related to residential housing or
sources of finance for commercial property, he said, recommending that policymakers direct the flow of money towards other sectors.
In his opening comments to the committee, Lord Turner said there is a need for more prudent capital and liquidity requirements on all banks, as well as new measures to constrain credit supply in the upswing.
"If the big UK banks which needed to be rescued in autumn 2008 had been multiple smaller banks, we might still have had just as much over-exuberant lending to commercial real estate developers, funded by risky short-term wholesale deposits," he added.
In other news, the FSA recently fined mortgage broker in Bramley some £115,000 for knowingly submitting nine fraudulent mortgage applications for himself and his family.
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