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FSA Looks To Implementing Long-Term Mortgage Market Policies

The chairman of the U.K. Financial Services Authority (FSA) Lord Turner said that the FSA’s detailed analysis of the mortgage market was highlighting a very complex situation where the FSA had to take account of short-term trends as well as design the appropriate long-term policy. These remarks were made at at the FSA’s mortgage conference held yesterday

He told the audience that careful thought had to be given to the relative merits of alternative policy instruments, and, specifically, the choice between product specific regulation, sales regulation and firm level regulation.

"So should the FSA end up recommending limits to LTV or LTI – the headline issue on which the debate about the future of the mortgage market sometimes focuses?," he said. "I do not at present know and I make no apology for that lack of certainty. What I have tried to do today is to indicate that the issue is a complex one, which requires careful consideration and further empirical analysis, running up to the FSA September discussion paper, and indeed subsequently, in a wide ranging debate."

The FSA plans to publish its proposals for changes to mortgage regulation in a discussion paper in September

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