It's in effect a demand for the new macro-prudential regulator being created by the Treasury which will sit within the Bank of England - the Financial Policy Committee, of which Lord Turner is a member - to have important and unprecedented new powers to determine credit creation by banks and to determine the distribution of credit.

BBC: Bank lending 'should be controlled'

Lloyds has said that following discussions with the banking regulator, the Prudential Regulation Authority, it does not need to sell new shares to boost its capital resources and enhance its ability to absorb future losses.

BBC: Lloyds and RBS 'won't be further nationalised'

The Prudential Regulation Authority, which will become the UK's regulator for deposit-taking institutions in April under the Bank of England, would have the power to ensure the ring-fenced bank to carry on with its business.

BBC: Business

FSA, Britain's new financial super-regulator, reprimanded the country's largest life assurer, Prudential , for mismanaging its salesforce.

ECONOMIST: A Japanese boost