BoE warns 'irresponsible' lending is back

The Bank’s latest Financial Stability Report, the first since the credit crunch, has examined how problems in the US sub-prime market affected financial stability and says a return to the crisis could happen. The report says banks might choose to continue to raise funding through the structured credit market, seeing recent problems as a ‘temporary set-back’ to a lucrative business model. However, the bank is concerned that, while such a move might improve confidence and liquidity more quickly, it might also risk a far more damaging repeat at some point in the future, and says this may a...