View more on these topics

FSA ‘crawling all over’ commercial lenders

FSA chairman Adair Turner says the regulator is “crawling all over” lenders’ practices in the commercial real estate sector.

He told MPs the FSA does not regulate the sector through conduct regulation but has started to look at how it can monitor banks through prudential regulation.

When asked if the FSA is looking at how banks lend in this sector, Turner said: “We are crawling all over it but I think the nature of commercial real estate means it does not give itself to a set of rules. But what I can absolutely assure you is that, on the prudential side, the issue of commercial real estate lending is now, and will be in the future, a key focus of the PRA and the FPC.”

Turner admitted the FSA has not paid enough attention to the issue in the past, noting poor decisions in the commercial lending sector was a factor behind the near demise of HBOS, before being bailed out by the Government.

He said: “The perfectly reasonable question raised by the HBOS document that came out last week, which tells a terrible story of bad lending in commercial real estate and bad controls, is what was the FSA doing? We were not doing enough.”

Emba group sales and marketing director Mike Fitzgerald says: “What the banks and their customers do not need is more obstacles to lending in the commercial sector.”

Recommended

FSA wins £32m land banking case

The FSA has secured a £32m High Court judgment against three land banks but says victims are unlikely to get their money back. The High Court ruled that James Kenneth Maynard, Countrywide Land Holdings Limited (Countrywide) and Plateau Development & Land Limited (Plateau) operated a collective investment scheme without authorisation and sold plots of land […]

Regulator is helpless on interest-only timebomb

FCA chief executive designate Martin Wheatley has admitted the regulator may be powerless to diffuse an interest-only “ticking time-bomb”, where thousands of borrowers will be unable to repay the capital at maturity. In its final MMR consultation paper, published in December, the regulator proposed lenders must assess affordability for interest-only loans on a capital and […]

Adviser’s ad fell foul of promotion rules

The FSA says an adviser’s newspaper advert about an investor day amounts to a financial promotion and has reprimanded the firm for failing to include appropriate risk warnings. Philip J Milton & Company recently advertised an investor day it held about the Greenwich loan income fund. Managing director Philip Milton says on the day investors […]

Budget 12: £2m houses face 7 per cent stamp duty

Homes worth more than £2m will face a new stamp duty rate of 7 per cent after a compromise between the Coalition parties to deliver a quicker rise of the personal allowance to £10,000. Currently stamp duty kicks in at £125,000 and is charged at 1 per cent, rising to 5 per cent on properties […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment