Independent Committee to Become Credit Masters

The Financial Services Authority (FSA) is to give the bank of England new powers to control and limit the amount of money that banks and building societies can give out in order to try and prevent over-lending and stimulate the British economy during recessions such as the current economic crisis.

A new committee is will be formed from members of the bank of England and the Financial Services Authority.  This committee which will be given various powers such as the ability to raise or lower interest rates depending on the state of the economy.

Amongst other possible powers, the committee may get the power to limit the maximum amounts banks can lend to future house buyers, and also the ability to additionally tax the financial sector in order to prevent future lending booms just like the one that precipitated the financial crisis.  It is hoped that these efforts will protect British financial institutions against over-lending.

There is currently some argument between the bank of England, the Financial Services Authority and the treasury on just how much power this committee should have, but generally speaking economic analysts see these potential changes as an important break from traditional banking ideologies.

This news comes amidst recent reports once again, that the recession is finally coming to an end.  These latest plans look set to increase confidence in the yet broken financial sector.

The plan to create this committee will be released before the end of the week; however there still remains some argument between the three financial institutions.  Analysts predict that a move away from free market loans is necessary in order to protect the British Economy from future financial collapse and once again to ensure British prosperity in the 21^st century.

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