18 March 2009
Saffron Building Society comments on Turner Review
The eagerly awaited Turner's Review has been published today, and much of the content was as many expected.
Widespread prudence sits at the heart of the review, rather than the focus falling on individual firms. The key areas covered by the review included: fundamental changes to capital and liquidity regulation; increased reporting; regulation of Credit Rating Agencies; an increase in powers to constrain risky cross-border activity; action to tackle unsuitable remuneration policies and a general toughening of the supervisory approach.
This attitude of prudence is one consistently applied by local mutual building Societies such as Saffron. Saffron Chief Executive Andy Golding gave his reaction to the Review:
"With all that has happened in the financial services industry in the last year or so, it is no surprise that a tougher regulatory regime is on the horizon. On the whole I agree with the areas suggested to receive more attention, as the focus should be on the highest risk providers and not impede those who operate low-risk models, such as building societies. As always I hope that common sense and proportionality will be central to the regulatory regime, so as not to inadvertently obstruct what is right for consumers through over-zealous regulation.
In addition the Review states that in some cases it is too early to recommend specific action, stating that options need to be debated. These include mortgage product regulation."
Andy Golding added:
"I am very much against product regulation. Mortgage Lenders have a duty to act responsibly and if the terms by which they can lend are dictated through regulation, responsibility goes out of the window. In my opinion, the focus needs to be on ensuring that all mortgage lenders adopt a consumer-focused and affordability-linked approach to mortgage lending.
It is true that some of the industry definitely needs cleaning up, but we should be careful what we wish for; blanket rules are not the way to do it."
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