Bank's new powers could hit first time buyers "In the mortgage sector, for example, it may on occasion be preferable to apply the [capital requirements] to only those mortgages with high loan-to-value or loan-to-income ratios at origination," the Bank said. Other examples it cited included raising capital requirements against exposures to monoline insurers or "special purpose vehicles." The FPC estimated that a single percentage point increase in capital requirements would add up to a quarter of a percentage point to banks" lending rates and reduce lending volumes by as much as 3.6pc. "The [powers] may alter the ease with which households and companies are able to borrow," the Bank said. It also conceded that the rules could cause economic growth to slow during a credit bubble. But it stressed that they would be of long-term benefit by reducing the risk of a future financial crisis and by making the economy more sustainable than by hitching it to speculative asset booms. "If these tools are successful in reducing the likelihood and severity of financial crises, their use is likely to boost the expected level of UK GDP," the Bank said. The best available studies point, on average, towards only a modest negative impact on near-term growth if [capital requirements] are tightened. The FPC will have two legal powers of direction from next year - the countercyclical capital buffer and sectoral capital requirements - and a third leverage ratio target from 2018. Any FPC decree would come on top of existing capital ratio requirements of up to 10.5pc. If the FPC presses the button, banks will have 12 months to comply or face "restrictions on dividends and bonuses." It will also be able to intervene with recommendations that do not require legislation. To help work out when to use the powers, the FPC has launched almost 30 indicators - ranging from ratios of house prices to rents to measures of total UK debt - which will be published in the Bank's twice-yearly Financial Stability Report. Any sharp changes would be likely to trigger a response.