Carney: Relaxation of capital rules will keep mortgages flowing
Bank of England governor Mark Carney said he relaxed capital rules for banks to make sure mortgage lending continued despite the decision to leave the EU.
Labour MP Rachel Reeves quizzed the Governor about the potential of a reduction in lending following the referendum.
But Carney said that he had relaxed the rules to “take off the table” concerns about credit supply. And he added that “the banks are well capitalised.”
Carney says demand, not credit availability, is more likely to wane.
He added: “We really want to make it as clear as possible to businesses and individuals that credit should be available for the right ideas, for the right transactions, be it a mortgage or a new business.”
However he warned that the relaxation of capital rules was not going to save the market on its own.
He said: “We would not represent this as a single silver bullet. It is part of a series of measures.”
Carney was speaking at the Treasury Select Committee.