Scrapping the Mortgage Charter is an indication of the brand new threat tradition on the Financial Conduct Authority, says its chief govt.
Nikhil Rathi stated that Chancellor Rachel Reeves “sees the regulatory system as having regulated for threat, not development. We are partaking significantly with this suggestions and can proceed to make adjustments at tempo.”
The chief of the regulator was talking on the TheCityUK annual convention in London.
He added: “Take mortgages. I’ve raised whether or not the Mortgage Charter – designed for a interval of sharply rising rates of interest – may very well be retired.
“With the Consumer Duty in place, repossessions low, and a maturing threat mindset, do we want this duplicative strategy with the added reporting burdens it brings?”
“As we assessment the mortgage market, what sign does it ship about political threat tolerance whether it is retained?”
Earlier this summer time, the City watchdog revealed a session paper on eradicating overlapping requirements, such because the Mortgage Charter, and outdated guidelines on interest-only mortgages.
His speech comes a day after the physique issued a second “wide-ranging” mortgage assessment this summer time, which it guarantees will open up the sector to competitors to profit homebuyers.
Its 72-page Mortgage Rule Review: the way forward for the mortgage market, contains choices on scrapping five-year mortgages, chopping the 1% minimal stress check margin and widening the usage of later life lending.
But Rathi added that opening up the house mortgage market, and different areas the physique covers, comes with threat.
He stated: “I’ve constantly referred to as for an open debate on threat urge for food — and metrics for tolerable failures, alongside ones for competitiveness and development, and operational efficiency — to make sure we shift to a stance that endures.”
The watchdog has made a number of adjustments and launched a sequence of consultations since, Prime Minister Keir Starmer and Rachel Reeves wrote to a variety of regulators final November, asking them to loosen guidelines that can enable financial development, significantly throughout the UK’s monetary sector.
