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Questions from hell | 15
Question: tions within firms. This especially relates to non-banks. It could even limit the funding
The Financial Services Bill seems to be those operating without the required con- available to certain banks as happens in other
increasing the powers given to the FSA, which trolled function permission; it will be able to countries although such a step would proba-
must be right in certain respects but, given ban them, fine them, suspend them for a bly result in the lender closing. Now it’s about
their failure to use their existing power longer period or limit their activities (and the stability and quality hopefully the domino
effectively, what will they gain and more firms) much more easily. The result is expect- effect won’t come into the equation.
importantly what will we the mortgage ed to be a more effective regulator.
intermediary market lose? Question:
Question: Do you think the proposed ultimate responsi-
Answer: The FSA, the Bank of England and the bility for affordability resting with the lender
Within the confines of this section of Treasury were all criticised for being slow to as proposed within the MMR will have an
Mortgage Introducer it will be difficult to give act when initially the newer sub-prime adverse effect on intermediaries?
you a full answer but here goes with some key lenders were collapsing in 2007/8 in particu-
issues. The Bill proposes enabling the FSA to lar. Who do you think will hold the real Answer:
be more fleet of foot by increasing their power or should hold the power to actually do As now some lenders will I believe still need
power to cancel or vary firms’ part IV permis- something practical to prevent the domino intermediaries to reach their business targets
sions, suspend them or close the firm down. effect? and consumers will still want what they per-
At a high level the FSA’s regulatory objec- ceive intermediaries to provide – ‘honest and
tives are being changed to include the protec- Answer: independent advice’ possibly with independ-
tion of the UK’s financial stability and a The short answer to your question is that I ent not as the FSA would define it.
greater focus on consumer protection. When believe the FSA should and will have Consumers want fair and objective treatment
things were going so wrong in 2007/8 the FSA increased powers shortly to control the and many believe only brokers can provide
was often criticised for not acting when in fact lenders, especially those that are labelled non- that service.
its hands were tied behind its back bank lenders. It will be required to more
often. Now it will be able to act faster and stringently assess business models, which I
improve the public’s understanding of finan- assume it already is. It has been considering You can contact Bill with your regulatory
cial services. The Bill also gives the FSA more placing asset limits on specific lenders or cer- questions by emailing:
powers relating to the control and manage- tain types of lenders and has recently pro-
ment of those people holding controlled func- posed increased capital requirements for
Bridging Finance January 2010 Mortgage Introducer
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