– 2016 Parliamentary Question to the HM Treasury
The below Parliamentary question was asked by on 2016-05-10.
To ask Her Majesty’s Government whether they are monitoring the lending practices of challenger banks” particularly with regard to their use of high loan-to-value ratios and low value-to-income ratios
Lord O’Neill of Gatley
This Government has fundamentally reformed the UK’s system of financial regulation.
We established the Financial Policy Committee (FPC) to act as the UK’s macroprudential authority, tasked with identifying, monitoring and addressing systemic risks to financial stability. This involves monitoring levels of leverage, debt or credit growth of all banks active in the UK, including so-called “challenger banks”.
In June 2014, the FPC took action to limit mortgage lending at high loan-to-income ratios; this action provided insurance against a rise in the number of highly indebted households.
We also established the Prudential Regulation Authority (PRA) as the UK’s micro-prudential regulator, responsible for promoting the safety and soundness of the individual firms it regulates, through minimising the risk they pose to financial stability.
The FPC’s latest assessment of financial stability risks from UK credit growth can be found in the record of its March 2016 meeting, which is available on the Bank of England’s website.
