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MMR: FSA insists “we are listening”

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  • 19/11/2010
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MMR: FSA insists “we are listening”
The FSA has tried to allay fears that it is intent on introducing its Mortgage Market Review (MMR) proposals regardless of industry opinion, insisting it is a true consultation.

Speaking at the CML conference in London yesterday, Sheila Nicoll, director of conduct policy at the FSA, said the regulator would not reach any final conclusions until the first half of 2011 when it had considered all feedback on its consultation papers and the proposals’ total impact.

She said the FSA would then consider whether further consultation was needed.

In a speech titled “MMR: Dispelling the Myths“, Nicoll said: “As we have always made clear, a consultation process is precisely that.

“Any suggestion that the FSA is determined to implement a particular set of regulatory measures, irrespective of their impact on the economy and the market, is a completely false view and one which is not in any way consistent with either our statutory obligations or the positioning of the material we have published to date.”

She added the FSA was still in the midst of engaging with stakeholders through the consultation papers and it had not conducted cost benefit analysis on all the possible actions it could take.

Nicoll said: “We will not reach any final conclusions on the appropriate package of actions to take without conducting a complete impact assessment not just on each individual measure but also on the effect in the aggregate.

“It is our intention to publish this analysis along with our final proposals in the first half of 2011. These conclusions will also, of course, take into account the feedback we have received, including that from the CML and its members.

“At that stage, we will, of course, consider whether any further consultation is necessary.”

Further “myths” Nicoll wished to dispel were the idea that the MMR is not needed because the market has self-corrected and arrears have not risen as high as first feared.

Also, that the UK mortgage market has only suffered due to external factors, with lending of £350bn “the norm” which regulatory changes should not stifle.

Nicoll also reiterated that the FSA has no intention of banning interest-only mortgages.

Read Sheila Nicoll’s full speech here

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