CML urges new regulator to engage with mortgage market

In his opening remarks at the CML's mortgage regulation conference yesterday, Smee urged the FPC to outline the key areas it wants to study each year in a similar way to the OFT and give the mortgage industry a chance to informally respond.

Smee, appointed to director general on 1 August last year, called the FPC a "real innovation" and added: "One would expect the mortgage market to attract scrutiny."

However, he added: "I would like to think that, as a matter of good practice, the FPC would want to engage with those who will be affected by its pronouncements and will want to have their input and perspective," said Smee.

He urged the regulator to set out and publish the terms on which this could take place, develop its public profile and engagement strategy.

"The industry needs to engage constructively with new regulatory themes; it cannot do this whilst the direction of travel remains opaque," said Smee.

The FSA is intended to be dismantled by the end of this year. In its place, the sector will be regulated by the FPC, the Prudential Regulatory Authority (PRA), and the Financial Conduct Authority (FCA).

The FPC, chiared by Mervyn King, is expected to form the "central plank" in the new regulatory regime and is charged with monitoring broader financial market risk and staving off another credit crunch.