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Stricter regulation is the way to avoid problems in future

If the FSA expected an easy ride following the publication of its MMR proposals it must have been sorely disappointed.

While it might have anticipated some strong words on extending its approved persons regime – which might explain its underestimation of 20,000 affected individuals – I wonder whether in today’s environment it expected such a negative response to its plans for greater income verification and a ban on self-cert deals.

The Council of Mortgage Lenders, the Building Societies Association and the Association of Mortgage Intermediaries are all up in arms on the subject of non-verified income but have any of them taken a long-term view?

When economic conditions improve and confidence returns to the market it’s inevitable that lending criteria will be relaxed.

The partly nationalised banks will expand lending to pave the way for a return to private ownership, overseas banks may come back and well capitalised players will defend their market share.

Without robust controls on lending – and that might mean product regulation – I doubt the mistakes of the past will weigh heavily on the decision makers of the future.

It’s a sad fact that light touch and principles-based regulation has failed. A wrong turn now could be the first step towards the next systemic failure.



Purchase approvals plummeted as buyers stayed at home in January

A fall of more than 10,000 in house purchase loan approvals in January has been blamed on bad weather and a seasonal dip. House purchase approvals declined to 35,083 in the month, according to figures from the British Bankers’ Association. The statistics, which record lending by big high street banks, show that January lending was […]

Lord Turner: the concensus that liberalisation is beneficial in all circumstances is based on ideology rather than evidence

Turner urges second thoughts on financial services freedom

Lord Turner, chairman of the Financial Services Authority, says more evidence is needed to show that the financial services sector should be further liberalised. Speaking at the Reserve Bank of India in Mumbai recently Turner told his audience that while a consensus has developed in the past two decades in support of ever greater growth […]

Gary Styles

Boost savings to save mutuals

The government should do more to encourage liquid savings as a way of boosting retail funding and supporting the beleaguered societies sector, says Gary Styles, risk and economics director at Hometrack

A bull case for US equities?

Neptune video: a bull case for US equities?

Watch Felix Wintle, head of US equities at Neptune, discuss why he believes US equities are in a structural bull market and the key factors that can drive the S&P 500 higher.

In the video, Wintle addresses the following:

• The US market and why — despite equities rising from 2009 — he believes the structural bull market only started in 2013
• Key economic and corporate factors that can drive the S&P 500 higher
• Investment themes and sectors offering exposure to the domestic recovery


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