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FSA reinforces warning of economic downturn

New FSA chief executive Hector Sants has reinforced the FSA’s view that the UK could be set for an economic downturn and concern that some in the industry may not be ready.

Speaking at the FSA’s Annual Public Meeting yesterday, Sants suggested the UK was at the “peak of the economic cycle and have been warning banks for some time to prepare for deterioration in the credit markets”.

Sants said the FSA is focusing on ensuring firms have properly stress tested their business models to ensure they can withstand market volatility.

The concerns follow a number of warnings from FSA managing director of retail markets Clive Briault of potentially troubling times ahead for the sub-prime lending market.

FSA chairman Callum McCarthy also warned last week that the FSA was keeping a “close eye” on the collateralised debt obligations market.

In his last speech as FSA chief executive, John Tiner told the FSA’s APM that recent tightening and volatility in the credit markets might provide a challenge to the regulator.

Tiner said: “We have been keeping a close eye on developments and have commented in the past that risk has been under-priced. For us the key is to understand the exposures and the transmission system from investors into the banking sector which underpins financial stability and to be confident that the banks are stress testing these exposures to test the adequacy of the amount of capital in each firm and the system as a whole.

At present we believe the system overall is robust, but this is clearly an area the FSA will need to continue to watch very closely.”


Kensington reveals profits dip ahead of £283m buyout vote

Kensington saw a fall in profits and a £10m write-down of its investment in specialist lender Money Partners in the first half of this year.The company says first-half profits fell to £26.1m from £28.4m last year.Kensington’s new business completions were down by 3 per cent to £1.83bn while completions for Money Partners were down by […]

Accord moving into right to buy sector

Accord is set to enter the right-to-buy market in September after getting authorisation to operate in England, Northern Ireland and Scotland.It is waiting for authorisation from the Welsh Authority, which is expected in August.Accord managing director Linda Will says the RTB market is coming back into vogue. She says: “A lot of the remortgaging right-to-buy […]

NU blunder overstates retirement income forecast

Norwich Union has overestimated the retirement inc-ome of thousands of savers by sending out inaccurate statements about how much cash they can expect to receive in retirement.An error in the calculation of the annuity rate means 97,000 customers received statements which overstated the income they could get in retirement by 15 per cent.The annual statements […]

Canada Life annual IHT survey results

75% of wealthy unaware of new residence nil rate band IHT allowance Just 4% were aware the new allowance will be up to £175,000 per individual Lack of awareness of IHT rules means families risk paying a bigger bill than they need 83% think the current inheritance tax rules are far too complex A remarkable […]


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