Britain’s top financial regulator, Lord Adair Turner, said today there was a need for direct controls on the supply of credit to prevent the build-up of dangerous asset price bubbles.
Turner said policymakers needed more than interest rates to tame asset price booms and urged the setting of a new macro-prudential body in the UK able to take pre-emptive action.
Speaking in Davos, the chairman of the Financial Services Authority called for a committee that would combine the insights of central bankers and regulators, with input from outside maverick economists to avoid the risk of “group think”.
