Housing bubble could weigh on banks Deutsche Bank has warned that the Bank of Englands Financial Policy Committee (FPC) could increase the capital requirements on residential mortgages to dampen the property market. The analysts said they expected the FPC to lift the minimum capital weight on UK home loans from 15% of their value to 20% as concerns grow of a house price bubble, meaning lenders will have to hold a greater amount of assets against mortgage portfolios. The use of the power would mark the first time the Bank of England had directly intervened to curb the growth of mortgage debt in the banking sector and would be seen as a way to avoid a more painful rise in interest rates. Deutsche Bank said the pressure was on the authorities to take some steps to cool the property
Posted on: Sat, 25 Jan 2014 07:36:55 +0000
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