FSA's Turner launches fresh bank attack

Lord Adair Turner, the head of the FSA, last night launched an outspoken attack on the banks, claiming their ability to create credit and money is ‘potentially dangerous'.

He also called for new powers for regulators to intervene in their lending, the Daily Mail reports. Turner, who is a member of the interim Financial Policy Committee, said the country should not rely on free markets to ensure bank lending goes to ‘socially optimal' borrowers such as small firms. He said only a fifth of the vast expansion in bank balance sheets in the run-up to the credit crunch had made its way into the real economy. Measures to control the banks might include risk-weightings for loans to small firms being set by regulators instead of the banks themselves. He ad...