By Huw Jones

LONDON, Jan 8 (Reuters) – Mortgage lenders must check better if borrowers can repay home loans, a global forum of regulators said on Friday in a wide-ranging report aimed at plugging regulatory gaps uncovered by the credit crunch.

The worst financial crisis since the Great Depression began in 2007 with defaults in U.S. home loans which, via securitisation, rippled across the world to harm the economy and force governments to use trillions of taxpayer dollars to shore up banks.

The G20 group of countries is spearheading global efforts to toughen up financial regulation and apply lessons from the crisis.

It asked a forum of three global regulatory bodies last November to devise ways to strengthen oversight so that system-wide and not just firm-based risks are also covered

The recommendations from the Basel Committee on Banking Supervision, the International Organisation of Securities Commissions and the International Association of Insurance Supervisors signal a marked shift in the breadth and depth of regulation and supervision.