Hector Sants, chief executive of the Financial Services Authority (FSA) has outlined a radical shake-up in the mortgage market. This will, he says, ensure that people who take mortgages can afford the repayments. The FSA will ban self-certified mortgages, where customers are not asked to prove their income, and mortgages containing "toxic combinations" which put borrowers at a higher risk.

Speaking on the programme, Mr Sants said that this was the "right time to be thinking carefully about how we address these issues before the next boom". But he added that the new rules would not rule out self-employed people from getting mortgages as long as they had the necessary verification of income.

And Mr Sants said that banks "should recognise their wider responsibility to society" when deciding on the size of their annual bonuses.

"They should recognise what has happened in the last few years, and they should recognise that without the interventions made by government and taxpayers around the world, the situation they would be in now would be far worse," he added.

The finance industry will have until 30 January 2010 to comment on the FSA's proposals.