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BSA slams “irrational pessimism” of regulation proposals

The Building Societies Association has slammed the “irrational pessimism” that is leading to a revolution in mortgage regulation.

Speaking at the BSA annual lunch David Webster, chairman of the BSA, says the latest changes proposed by the Financial Services Authority and the EU create nothing short of a “revolution”.

He says: “The Mortgage Market Review represents a regulatory solution to a problem the market has already resolved.”

And Webster says it would be very helpful if they could see the authorities’ analysis of the impact of regulation.

He says: “I cannot ignore the vast programme of regulatory change occurring at the moment that affects, or will affect almost every area of our business, we’re having the Mortgage Market Review, and we’re going to have the EU’s Responsible Lending policy.  

“More onerous and expensive liquidity arrangements are already with us and we’re having capital requirements increased, and more tightly defined. And we face a complete overhaul of the regulatory systems as the FSA disappears and is replaced by a new system with the Bank of England at its heart.

“Given the huge changes in the markets we have already seen, does the regulatory revolution represent overkill? 

“Yes, there were certainly examples of irrational exuberance on the part of institutions in the run-up to 2007, but there are also currently examples of irrational pessimism on the part of regulators as they seek to address the problems of recent years in what might be far too restrictive a manner, given the need to create the conditions for continued economic recovery.”

 

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  • Not an IFA 17th November 2010 at 6:26 pm

    …represents a regulatory solution to a problem the market has already resolved.

    Yes but how long for. The Financial “gurus” have lost all respect amongst the populus, why should we trust what you are saying “LIGHT TOUCH” did not work before…

    “Have you noticed the best referees allow a free flowing game” .. Comparing yourselves to over paid footballers who do anything for cash are you? But they don’t come round and trash my house after they loose…

  • grey haired broker 12th November 2010 at 3:00 pm

    Have you noticed the best referees allow a free flowing game, they keep a low profile. The players know that the referee will act decisively when necessary. The referee understands that the fans have come to see the game and not him. The players respect the referee and know that if they step out of line by abusing the rules he will take action.

    There is mutual respect.

    Then we have the FSA…..

  • John Steed 11th November 2010 at 5:23 pm

    It is obvious that the FSA want us to fall in line with Europe and rely more on people renting property rather than purchasing it.Most sensible people aim to be mortgage free by age 65. If they rent all their lives under the brilliant new scheme of things can anyone tell me how they will be rent free at age 65?

  • John Lacy 11th November 2010 at 4:38 pm

    The FSA want to create a world devoid of innovation and with just a few large lenders operating the same affordability calculation and conforming to their Stalinist mediocre view of the world.
    God save us from these maniacs