1 December 2009
The UK’s financial regulator, the Financial Services Authority, has been accused by the banking industry of treating both banks and building societies like ‘drug dealers at the school gates’.
In a scathing verbal attack Matthew Wyles from the Council of Mortgage Lenders said that the FSA was suffocating the banking industry, and was treating lenders like ‘drug dealers at school gates’ that were trying to lure innocent customers for their own financial gain.
As part of his attack on the FSA Wyles said that the reforms that had been planned by the FSA would simply result in higher borrowing costs for consumers, which would be adding insult to injury, as well as risking millions of consumers being frozen out of the mortgage market altogether due to the FSA putting a stop to self cert mortgages.
This came after the FSA put forward proposals to shake up the market following the financial crisis.
However, the FSA has defended its proposals stating that lessons have been learned over the past couple of years, and the lessons that have been learned need to be used to prevent the same mistakes and consequences arising in the future.
The FSA has denied that its proposals will affect millions of self certified people getting mortgages, as the agency cannot see why self employed people are not able to prove what they are earning.
Tags: Banking, Financial Services Authority, Matthew Wyles, council of mortgage lenders, mortgageWyles stated: ‘I have the feeling that regulators see lenders as the sweet shop owners - or worse the drug dealers at the school gates - of the mortgage market, enticing innocent consumers into their clutches and then getting them hooked. The FSA moves from the principle of caveat emptor at great peril. It risks creating the kind of moral hazard it wishes to avoid, where consumers feel they need take little or no responsibility for their own financial decisions.’
The FSA’s allegedly cavalier attitude towards lenders may have an impact on the availability of finance graduate jobs.In the current economic climate, people who hold professional qualifications are in the best position to exploit the opportunities which are available.