The Mortgage Insurance Trade Association (MITA) recently submitted its commentary concerning the Financial Services Authority (FSA) Consultation Paper 189 (CP 189), which was released last year. CP189 outlines the FSA's plans for implementation of Basle II and EU Capital Adequacy Standards. MITA endorses the FSA's consultative approach in facilitating the implementation of new capital standards and has identified a number of concerns set forth in this response.

"[CP189] basically outlines the FSA's view on how they would implement the accord to other segments of the industry and its approach to risk weighting for mortgage holdings," said one source at MITA. "We've encouraged the FSA to look at LTVs as a key determinant to risk, but we feel that Basle has been fairly vague as to how it should be applied."

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