Press Room
Shapps Slams Pernickety Proposals On Sensible Lending
Housing minister Grant Shapps has given his clearest indication yet that he is opposed to the Financial Services Authority's proposals on 'sensible lending'.
He likened them to closing the door after the horse had bolted and said the “pernickety” proposals could be a step too far.
He also suggested that the proposals, which critics have said would severely limit levels of lending, would not even prevent problems of the past recurring.
Answering delegates’ questions at the National House-Building Council’s annual lunch, he said: “Look, I’m absolutely clear about this. I think it was at the moment when I realised that I would not have a mortgage if the MMR changes went through, that I kind of thought this might be going a step too far and there’s no point in closing the door after the horse has bolted.
“The problem with the mortgage market was not some sort of pernickety issue to do with whether the FSA or anybody else was talking about whether you could lend X or Y percentage and what form you had to get the end user to sign.
“It was because there was a lack of central regulation on the way the banks were operating, on their ability to carry on operating even after they did not have the balance sheet to do it, as Northern Rock and RBS and people like that were doing.
“So, what is required here is proper, sensible, top-level regulation, not pernickety, down in the dirt, kind of ‘what you can and what can’t do’ as a mortgage company.
“I hope that the FSA will be getting that message from you and everyone else.”
He concluded: “I think it is very important we learn the lessons of the past without, in effect, repeating them, which is what I think they are in danger of doing.”
The Council of Mortgage Lenders recently called for a political debate on the Mortgage Market Review.
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Article date: 11/29/2010 12:00:00 AM