Professor Philip Lane:

In the mid-2000s, when the scale of the boom was becoming obvious I do not know because I have not looked at what they were up to in detail, but I am guessing they were definitely paying attention and they did have financial stability reports and so on. The issue was the reluctance to make big decisions. Their analysis might have shown that risks were going up in the mid-2000s but they were too slow and too reluctant. They made some decisions. There was an increase in the capital charge on high loan to value mortgages and so on but it was not sufficient. I do not think it was an analytical issue of not understanding what was going on, it was basically a question of whether they were prepared to pull the trigger to cool it down.