Financial stability needed
Head of the UK's bank regulator calls out for the creation of a new body to monitor the stability of the financial system.
Financial Services Authority Chairman Adair Turner is in agreement that there needs to be the creation of a body to monitor the stability of the financial system. The body would theoretically function like the Bank of England's Monetary Policy Committee, and tools would be placed in the hands of the body to ensure that bank lending does not grow rapidly out of hand. The tools in place would also ensure that risk would be monitored, not endangering the broader economy like it has been doing.
The newly suggest body is looking to be favored more lately considering United Kingdom policy makers have had trouble trying to find a replacement for the debauched system of bank supervision and regulation that existed before the financial crisis began in late 2007. Turner's main support is for a joint financial stability committee chaired by the Bank of England governor, and if this does not happen then there will be unnecessary competitive behavior and a lack of cooperation in the economy.
The proposal at hand has been thought through carefully and will give the newly appointed body more control based upon how the economy is reacting. For example, the Bank of England would decide when capital requirements could be changed. The ability to slow or speed up growth of credit will keep the economy from over or under heating.
The suggest need for financial stability has the sterling's exchange rate at USD0.6091 and EUR0.8582.
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