Be very afraid. It is not enough that capitalism is collapsing and that there are only three mortgage available from lenders – and only one person in the country who wants one – but now, the new FSA chairman has said it will have to raise fees in the future.
‘Supervision on the cheap’ is not an experience most broker firms would agree with, but Lord Adair Turner has warned the age of light-touch regulation is over. Promising to wipe the slate clean, he has given notice that fees paid by banks and insurers will have to rise to pay for tougher supervision.
The obvious worry here is that there will be a read-across for everyone who is regulated by the FSA, and fees will rise across the board. On the positive side, he also said he will hire industry figures to help police firms, as he likes the idea of poachers turned gamekeepers. He has also confirmed he will pay more in salaries to attract the best people, so all those who cannot afford to remain in the industry should form an orderly queue.
If confidence in the global banking system does not return soon, there will not be much of an industry left to regulate. While lenders have professed themselves pleased with the comprehensive bailout plan, this has not yet transmitted through to Libor and freed up the wholesale money markets. The industry needs time to work through all the ramifications, but while nothing happens we inch closer to recession.
n As a point of clarification, in the story “Censured broker considers legal action against FSA” (Mortgage Solutions, p1 06/10/08), it was written that broker Stephen Jones received a compliance check from Bankhall prior to the FSA visit, in which he was given a clean bill of health by Bankhall. Mortgage Solutions would like to clarify the subsequent FSA action taken against the broker was separate to this check and in no way a reflection of Bankhall’s work. n
