Leader: Get real about regulation
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It was all change at the Financial Services Authority last week with Jon Pain, head of supervision at the regulator, announcing he will be leaving in 2011 and Lesley Titcomb, formerly director of small firms, becoming acting chief operating officer.
With Hector Sants, chief executive officer, agreeing to stay on and transfer across to the Bank of England and chancellor George Osborne signing the FSA’s death warrant for 2012, such reshuffling was inevitable.
But it would be unwise to see these changes as a sign that regulation of the mortgage market is going away. The same people and the same rules will continue to hold brokers and lenders in their vice-like grip.
Lenders are certainly running scared. Many big changes to product structures now seem to have the FSA’s fingerprints all over them, as we saw with the recent clampdown on interest-only. The effect this will have on innovation - hitherto one of the UK market’s unique selling points - is pretty obvious.
At the same time, many in the industry are campaigning to warn brokers to be vigilant about fraud. That’s sound advice, especially when the regulator is aggressively weeding out advisers who bend the rules to feather their own nests, or don’t have adequate systems and processes in place. And the upcoming approved persons regime will see the pressure on the advice sector become even more intense.
Many may hark back to the days of self-regulation under the Mortgage Code Compliance Board and rightly question what the FSA has achieved. Our regulator may have failed to guard against the current crisis, but it’s time to accept that regulation is not going away.
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