Written question asked by Vincent Cable (Liberal Democrat) on Tuesday, 29 February 2000, in the House of Commons. It was due for an answer on Monday, 6 March 2000. It was answered by Melanie Johnson (Labour) on Monday, 6 March 2000 on behalf of the Treasury.

Treasury

Question: To ask Mr Chancellor of the Exchequer, what arrangements he has to review prudential upper limits on loan-to-value ratios by mortgage lenders; what are the rules of the Treasury in setting prudential limits; if he will obtain and publish copies of the rules of the Bank of England and the Financial Services Authority relating to setting prudential limits; and when the prudential limits were last reviewed.

Answer: Dr. Cable: To ask the Chancellor of the Exchequer what arrangements he has to review prudential upper limits on loan-to-value ratios by mortgage lenders; what are the rules of the Treasury in setting prudential limits; if he will obtain and publish copies of the rules of the Bank of England and the Financial Services Authority relating to setting prudential limits; and when the prudential limits were last reviewed. [112516] Miss Melanie Johnson: The Financial Services Authority and the Building Societies Commission are the independent prudential supervisors of banks and building societies respectively. All their prudential notes are publicly available. In carrying out their responsibilities, the supervisors take a wide range of factors into account, which includes assessing lenders' exposure to mortgage risks, and undertake regular reviews of market practice. It is a requirement of authorisation that banks and building societies should run their operations prudently, and they should apply a minimum 50 per cent. risk weighting to assets fully secured on land.

Secondary information