UK regulator warns on worsening liquidity risk

Mortgage lenders must protect themselves against the "very real prospect" that liquidity conditions will worsen in 2008, Clive Briault, the retail managing director at the Financial Services Authority (FSA), Britain's banking regulator, said on Tuesday.

Speaking to the Council of Mortgage Lenders, Briault said that there is "a very real prospect that conditions will worsen further into next year, in terms of both liquidity and credit risks." He advised lenders to:

assess their funding and

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