Standard Chartered (LSE:STAN)
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 Banning households from taking out excessive home loans should be a matter for government, not the Bank of England's new Financial Policy Committee, BOE deputy governor Paul Tucker said Thursday.
In an opinion piece in the Financial Times newspaper, Tucker said the central bank in March decided not to ask the government to empower it to restrict loan-to-value ratios or loan-to-income ratios on mortgage lending because it felt it could better safeguard the stability of the financial system by varying banks' capital requirements against certain types of lending.
"Outright bans on households taking out loans with high LTVs--including banning families borrowing from outside the U.K. financial system--would, in the view of many of us, be a matter not for the FPC but for government to pursue directly," Tucker said.
The FPC is a new body charged with safeguarding the stability of the financial system. It currently has an advisory role pending the passage of legislation giving it full powers in 2013. Last month, it recommended the government arm it with tools to vary the size of banks' capital buffers depending on economic conditions, vary the capital banks ought to hold against lending to specific sectors of the economy and limit the amount banks can borrow against their assets.
Tucker said the FPC will not seek to micro-manage the banking system or the allocation of credit in the economy, but will instead deploy its powers to boost the resilience of the financial system.
His remarks may be interpreted as a riposte to Peter Sands, chief executive of Standard Chartered PLC (STAN.LN), who last month criticized the FPC for seeking over-reaching powers he said reeked of "1970s-style quasi-nationalization" of the banking industry, and for rejecting the power to influence loan-to-value ratios for mortgages, which he said is a tool favored by similar regulators elsewhere in the world.
-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; jason.douglas@dowjones.com
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