BoE wants curbs for risky lending

The Bank of England gave a clean bill of health to Britain’s flagship mortgage guarantee scheme yesterday, sparing the government from potential embarrassment in the run-up to a national election.

However, it asked for new powers to curb risky mortgage borrowing — including funding for buy-to-let investments for the first time — and said it would speed up plans to limit how much banks can lend relative to their capital.

When the BoE took over regulating Britain’s financial sector in April 2013, it shied away from the politically sensitive job of limiting how much Britons could borrow to buy a home. Since then, house prices have jumped 14% and the BoE’s new Financial Policy Committee has grown in confidence.