Net advances in the residential mortgage market fell from £110 billion a year in the four or five years running up to 2008 to around £10 billion this year, he said.
“Few UK industries will have experienced such a precipitous decline in activity.”
At the BSA annual lunch, Webster continued he could not ignore the vast programme of regulatory change occurring that affects, or will affect almost every area of the mutual market.
He listed the Mortgage Market Review, the EU’s Responsible Lending Policy, more onerous capital and liquidity requirements and a complete overhaul of the regulatory structure as the FSA disappears and the new tripartite system replaces it “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?” he asked.
“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,” he said.
