The Financial Services Authority, once the high priest of the City of London’s “light touch” regulatory cult, now favours using heavy weaponry against banks. The FSA’s new proposals for regulating the residential mortgage market are crude. But they should, nonetheless, be welcomed.

The watchdog’s new proposal is to insist that banks consider a greater range of risk factors than they had previously when writing mortgages. The FSA recommends that banks should consider loan-to-value ratios on the mortgage, household income, expenditure, credit history and existing debts.