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Setting the scene (firmly from the intermediary perspective!) Ben Stafford AMI. Themes. The market today FSA Government interest European initiatives Market issues. Mortgage Lending. Mortgage lending, £m Source: Bank of England. Outstanding Balances.

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Setting the scene

(firmly from the intermediary perspective!)

Ben Stafford

AMI


Themes

  • The market today

  • FSA

  • Government interest

  • European initiatives

  • Market issues


Mortgage lending
Mortgage Lending

Mortgage lending, £m Source: Bank of England


Outstanding balances
Outstanding Balances

Secured and unsecured lending, outstanding balances, £bn Source: Bank of England


Interest rates
Interest Rates

Interest rates, % Source: Bank of England, SML


The market
The Market

  • 7,500+ regulated firms

  • 92% “small” firms

    • (turnover of less that £3mn, majority < £1mn)

  • 60% new to FSA regulation

  • Over 500 are new to regulation

    • weren’t regulated by MCCB

  • 90% also sell GI

  • 12,500 ARs

  • Since N(M), 400 new applications

    • but 100 have cancelled / varied their permission


Fsa themes in 2005
FSA Themes in 2005

  • Supervision themes:

    • Authorisation issues

    • IDD & KFI survey

    • Geographic visits

    • Individual issues

    • Policing the perimeter

    • Taking an interest

  • Lifetime Mortgages

  • Financial promotions

  • T&C focus

  • Regulatory reporting

  • Fees & costs

  • MCOB review…!


Treating customers fairly
Treating Customers Fairly

FSA work:

  • Principle 6 :“A firm must pay due regard to the interests of its customers and treat them fairly”

  • July ‘04: “TCF Progress and next steps”

  • June ‘05: next paper

  • TCF Steering Group

  • TCF implementation plan

  • Responsibilities assigned

  • MI and evidence

Key questions:

  • Principles based?

  • Evidence required?

  • CBA?

  • Governing Function?

  • Supervisor action?

  • Enforcement?

  • Necessary NOT sufficient?


The bill
The Bill

For firms

  • Stub period & periodic fee:

  • FSA fees

    • £620 & 50% (- £70 MCCB)

  • FOS fees

    • 2 cases free

    • £50 (M) + £50 (GI)

    • £360 / case (£850 MCAS)

  • FSCS fees

    • £50

  • Instalments!

Regulation costs

  • Direct costs:

  • FSA:

    • £266.6m

    • M&GI: £36.8m

  • FSCS:

    • £37m

  • Indirect costs:

    • PII

    • Compliance

    • Lawyers

    • Time

    • Opportunity cost


Uk government themes
UK Government Themes

  • ODPM:

    • Five-year strategy low-cost home ownership

    • Home Information packs

  • OFT:

    • Review of PII

  • DTI:

    • Consumer Credit Act

  • Treasury:

    • First time buyers

    • Home Reversions

    • Miles review



“Events, dear boy, events”

  • Depolarisation

  • Housing market pundits!

  • FSCS

  • PI – capacity and cost

  • Access to capital

  • Basel II

  • Consolidation:

    • Lender

    • Intermediary

  • Reputational risk


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