Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Mortgage Rules Needed to Avoid Sub-Prime Crisis, Turner Says

Tougher rules on mortgage lending will rein in the type of practices that led to the U.S. sub-prime crisis, Adair Turner, chairman of the Financial Services Authority, said today.

The review of the mortgage market, which will restrict interest-only and self-certified mortgages, will stop banks relying on rising property prices to balance the risk that a borrower might not repay their loan, Turner told lawmakers in London today.

The practice “was the absolute core of the U.S. sub-prime disaster,” Turner said.

The FSA has proposed plans to reform the U.K.’s 1.2 trillion-pound ($1.89 trillion) mortgage market, arguing some practices exacerbated the banking crisis that followed the collapse of Lehman Brothers Holdings Inc. in 2008. The watchdog is seeking views on the proposals for the seventh time since the review began in 2009. The full set of proposals will be implemented in 2013.

The regulations require lenders to assess the impact of rising interest rates in mortgage-approval calculations and ban interest-only mortgages in cases where the borrower would have to rely on rising house prices to repay the loan.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.