Regulator confirms it is blocking aspiring lenders from the market

16 November 2009 | By Natalie Thomas

Hector Sants, chief executive of the Financial Services Authority, ad-mitted last week that the regulator has purposely deterred several new entrants to the lending market.

Last week Mortgage Strategy warned that the FSA is placing an increasing number of obstacles in the way of would-be lenders.

At a conference in London last week Sants told delegates: “In the deposit-taking industry we have worked to limit or reduce retail depositor exposures by forcing firms to leave best buy tables or the market, and we have also deterred several aspiring new entrants.”

Sants also says the regulator will be increasingly proactive in testing the risks inherent in products while employing techniques such as mystery shopping to test outcomes for consumers.

He wants to see a cultural and behavioural change in the financial services industry to ensure the lessons of the crisis provide the outcomes
Sants says: “There is an absence of acceptance of collective respon-sibility for what has happened. I am unconvinced that all senior managers have taken on board the need to change.”

Sants says the FSA has already introduced a tougher approval process for senior management personnel and seen a number of applicants withdraw as a result of the challenge. He adds that the regulator is also looking closely at individuals’ ability to create ethical frameworks.

Meanwhile, at the Mortgage Business Expo last week, Lesley Titcomb, director of small firms at the FSA, told delegates that it has no problem with new lenders.

But she says: “We will ensure these firms have sustainable business models and add value in the longer term while not exposing customers to unacceptable risks.”

 

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