Speaking at the CML MMR conference this morning, Coogan said there is a “real, tangible risk” that unintended consequences in the MMR will undermine the FSA’s work since the crisis hit in 2007.
He said: “The first and most compelling is that the MMR on its own is largely irrelevant in addressing past areas of consumer detriment. Cumulatively, with other regulatory and prudential changes in development, there is a real, tangible risk that unintended consequences in the mortgage market will undermine the FSA’s good work since the crisis hit in 2007.
“Despite this cautionary note, I should say that we support the MMR in principle, largely agree with the FSA’s diagnosis of the problems, but have some reservations that the proposed treatment could harm the patient.”
Coogan said the FSA had put forward some regulatory measures in the belief that the market has not self-corrected, when it has.
He said: “It demonstrably has – the cowboy lenders and intermediaries are out of business, the “irrational” consumers are approaching debt in a more measured way – paying off debts rather than increasing their exposure. And underlying these behavioural changes is the fact that mortgage funding is rationed rather than the surfeit of money washing through the UK in the 2006/2007 period.”