FSA opens debate over future product interventions
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The Financial Services Authority says it wants a public debate about product intervention and any decision to outright ban products in the future.
The mortgage industry has long feared that LTV caps and other more direct product intervention could be on the cards as part of the Mortgage Market Review.
Launching the FSA’s discussion paper this morning Lord Turner, chairman of the FSA, argues that the key issue is, “how far along this spectrum of earlier and more intense interventions we should progress”.
The discussion paper is designed to look at how the FSA, and in future the proposed Consumer Protection and Markets Authority, should pursue the objective of consumer protection and specifically the issue of product intervention.
The FSA says it has already introduced a more interventionist approach with the aim of anticipating consumer detriment where possible and stopping it before it occurs.
The approach aims to reduce consumer detriment by dealing with problems earlier, scrutinising the whole of the product lifecycle from start to finish rather than just focusing on the point-of-sale.
Lord Turner adds: “Our analysis has led us to the conclusion that a significant shift in approach is required but there are important tradeoffs to be struck – between consumer protection and consumer choice, between effective regulation to prevent customer detriment and the costs that that will inevitably impose.”
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Readers' comments (3)
Dave | 25 Jan 2011 11:31 am
When will they learn??
If this is allowed to happen, they will again use a hammer to crack a perfectly satisfactory nut!
They will impose unnecessary and unworkable rules that will effectively deny viable clients from getting a mortgage (or refinancing an earlier, more expensive deal).
The very fact that they even 'propose' these things, shows how out of touch they are with reality.
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Anonymous | 25 Jan 2011 11:56 am
Is this "nut" the world-wide credit crunch, which was largely brought about due to the lack of product intervention?
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mic2002 | 25 Jan 2011 6:29 pm
When are we going to have a debate over the issue that the total cost of rules based regulation v's the benefits to consumers since 2004 has been a total failure and basically doesn't work?
Dear Anonymous re the credit crunch - read Lord Turners report - products ie mortgages (particularly UK loans) was not the cause of this.Strange but true.
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