Chancellor George Osborne has asked the Bank of England to decide whether it needs more powers to control banks' risk-taking.
His intervention is the latest sign that Britain is going beyond international banking rules to curb its financial sector after taxpayers paid billions of pounds to rescue several banks during the 2007-09 financial crisis.
The Bank's Financial Policy Committee can already shape the regulation of Britain's financial system. It has powers to force banks to hold more capital but has no direct say over a separate tool for reining in big banks' balance sheets, a so-called leverage ratio.
Global regulators, keen to make banks safer after the financial crisis, are focussing on this leverage ratio as a way to curb risk.
Osborne's action accelerates a review of possible FPC leverage ratio powers that had been anticipated at a later date.
The review would also have to show that implementing the leverage ratio faster or higher than the Basel accord would help UK financial stability, Osborne said.
Source: Reuters
