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Setting the scene (firmly from the intermediary perspective!) Ben Stafford AMI

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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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Presentation Transcript
slide1
Setting the scene

(firmly from the intermediary perspective!)

Ben Stafford

AMI

slide2
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
slide12
“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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