Financial regulators issue new guidelines to tighten oversight
International financial regulators on Friday issued new recommendations to toughen up regulation of the industry, including the mortgage sector, in a bid to prevent a repeat of the global credit crisis.
"There are some key recommendations in this report that, once implemented, will reduce those gaps and strengthen regulation of the financial system," said John Dugan, who chaired the group of regulators until the end of 2009.
The list of 17 recommendations covers the banking, insurance, securities, mortgage and hedge fund sectors.
Under the new guidelines, lenders offering "teaser-rate mortgages" -- home loans that allow very low initial monthly payments -- should no longer use the lower rates as the basis when calculating borrowers' ability to pay.
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