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

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

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

  2. Themes • The market today • FSA • Government interest • European initiatives • Market issues

  3. Mortgage Lending Mortgage lending, £m Source: Bank of England

  4. Outstanding Balances Secured and unsecured lending, outstanding balances, £bn Source: Bank of England

  5. Interest Rates Interest rates, % Source: Bank of England, SML

  6. 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

  7. 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…!

  8. 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?

  9. 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

  10. 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

  11. And if I get bored…

  12. “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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