Lord Turner may not have the most popular things to say about bank lending, but nobody should question how essential new banking regulations are. The bottom line with his message - if people want a safer financial system, stricter lending criteria must prevail. As the chairman of the Financial Services Authority, he said the ability of banks to lend to people as well as businesses, had to be closely scrutinized to make sure the possibility of the UK plunging into a recessionary period again is not a question.

He commented on the new reform, saying: "Major reform of the global regulatory regime is essential. At the core of that reform are new capital and liquidity rules which will change the dynamics of credit supply, with consequences that all of society, consumers, politicians and businesses need to understand and accept."

The Basel III agreements, instituted last week, forces banks to keep more capital on hand to ensure there is a buffer against potential losses. Critics attacked the agreements as being too soft, but the FSA chairman commented on how important the timing of the new regulations is, saying: "We want much higher capital and liquidity levels in the future, but if we introduce them too rapidly, we stymie economic recovery."

Lord Turner also mentioned that future homeowners should prepare now for a challenging process of getting a first mortgage. He said: "We must act if needed to constrain credit booms before they end in busts."

He put the future in perspective, saying: "Taking away the punch bowl, however, will not always be popular," he said. "It could mean restricting mortgage credit when individuals are buying houses in a rising market... it means slowing down credit booms which, as long as they last, make governments popular and swell their tax revenues."