Central bank control of credit

[dewdrop]

During the period of the rapid growth in credit which has led to all our problems was it possible for Central Bank to instruct banks to limit their lendings. I recall way back in the sixties and later there were many periods of severe credit rrestrictions imposed on banks and on particular sectors.

 

[Sunny]

During the period of the rapid growth in credit which has led to all our problems was it possible for Central Bank to instruct banks to limit their lendings. I recall way back in the sixties and later there were many periods of severe credit rrestrictions imposed on banks and on particular sectors.

Yes. They could have increased the reserves needed against certain lending activities such as mortgages or property loans. Would have made mortgage lending more expensive and less attractive to banks.

 

[TRS30]

Yes. They could have increased the reserves needed against certain lending activities such as mortgages or property loans. Would have made mortgage lending more expensive and less attractive to banks.

Have they done anything along these lines as of yet?

Is there anything to stop banks creating a 'Celtic Tiger II'?