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FSA “crawling all over” lenders’ commercial lending operations

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

Speaking at a Treasury select committee evidence session on the MMR today, Turner said while the FSA does not regulate the sector through conduct regulation, it has started to look at how it can monitor banks operating in this sector 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.

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.”


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. angelic, what else ! 14th March 2012 at 4:04 pm

    well done FSA this is great news. I have a client and close friend that fell on hard times in recent years and his commecial bank have nailed him to the point his health has been affected.

    I saw a statement of his mortgage and every other line was an arrears fee, telephone call fee, or a letter fee or a charge for something. It is horrific and there was/is no TCF in the mix at all, brutal is an understatement.

    I tried talking it through but met with a brick wall and an almost mob type attitude to the fees and extra interest charges etc.

    This may not be what FSA are getting at here but if they look they will find. I dont say it often but well done FSA, move on this.

    Also you should look at commercial buildings insurance where landlord charges the premium to client at an inflated price splitting extra with broker, lease agreement covers that, yet another example of mob activity in financial services.

  2. Well said Angelic. Unfortunately as we speak there are telephone calls being made inviting Adair to a little dinkies party where his banking director masters will tell him to look at sometning else and pronto!

  3. That’s another fine mess you’ve gotten us into Stanley.

    A bit like lending on residential developments based on commercial firms valuations of the units at levels they never reached even at the peak.

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