Turner wants FSA to have more power to protect bank customers

The reputation of banks, and the confidence that consumers have in these financial institutions, has plunged over recent years, since the onset of the global credit crisis in 2007. With this in mind the chairman of the UK’s financial regulator, the Financial Services Authority, has called for the authority to be given greater powers to protect bank customers.

Lord Turner said that the FSA needs greater powers in order to protect consumers. The FSA is now set to launch a discussion paper based on the protection of bank customers. The debate will be centred around how the FSA could help, and what sorts of measures it could take in order to protect customers.

Officials from the FSA said that they want to find ways to take action to protect bank customers earlier on rather than having to wait until a number of complaints have been made before any action is taken. Some of the measures that the FSA is likely to look at will include the banning of some financial products, and a cap on the fees that are being charged on a variety of other financial products.

Lord Turner is set to argue that the FSA, or its replacement agency if it is disbanded, should be given greater powers to give bank customers the protection that they want and need. This comes following a surge in activity at the FSA, which has been cracking down on insider dealings, and has enforced a greater number of fines over the recent years.

Referring to the debate one FSA spokesperson said: “The debate will be about the types of things we do, different product regulation. Rather than waiting until lots of consumers have had to make complaints, can we take action earlier?”

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Financial regulator defends plans over mortgage lending

The UK’s financial regulator, the Financial Services Authority has recently been defending its plans and proposals with regards to the mortgage and property markets, stating that something has to be done in order to avoid another crisis like the one seen over the past couple of years since the onset of the global financial crisis.

The FSA has taken a lot of flack from group such as the Council of Mortgage Lenders over the plans and proposals that it made relating to the mortgage sector. The regulator wants to put an end to the interest only mortgage, which the CML believes will eliminate any chance of some people getting onto the property ladder. It is also thought that plans to reduce the LTV levels that can be offered by lenders could further decrease affordability for potential buyers.

The FSA has now said that individual affordability needs to be carefully assessed to help the industry from experiencing the chaos that has been seen over the past couple of years. He said that in the past it was assumed that lenders were being responsible when it came to mortgage lending and taking risks, and that’s why these measures had not been required in place at the time. However, he added that times had changed especially in the financial market and measures were now needed to increased security.

She said: “We believe that a robust and effective assessment of individual affordability has to underpin any sustainable lending model. When developing the current regime, we assumed that lenders would have a prudential self-interest to manage their credit risk responsibly and, therefore, prescriptive conduct requirements were not required. That has been shown to be a mistake and we are therefore proposing to be much more explicit about the standards we expect.”

Tags: mortgage, interest, fsa, prescriptive conduct requirements, Financial Services Authority, finance, onset

MPC official expects growth in the economy

According to a recent report an official from the powerful Monetary Policy Committee has predicted that there will be growth in the UK economy over the course of this year. Read more

Tags: official expects growth, recovery, economics, job losses, economic growth, Monetary Policy Committee

Unemployment levels could rise due to housing slump

The housing slump in the UK has been making the headlines on a regular basis over recent months, with house prices already having tumbled and with predictions that they will fall further over the coming months. This in itself has put potential buyers off because many are worried that house prices will continue to fall once they have purchased a property, and that they could then be left facing negative equity. Read more

Tags: estate agents, onset, official, gas bills, unemployment