View more on these topics

Harmony strikes the wrong chord

In a speech last week, FSA chairman Lord Adair Turner said future developments in the European Union towards improved macro-economic coordination and financial stability should not apply a burden of “unnecessary integration” on non-Euro members.

After Turner’s inept performance at the Treasury select committee about the mortgage market review in March, it was encouraging to read such a wise comment.

I do not know whether, in addition to his main focus of macro prudential regulation, Lord Turner also had in mind the EU mortgage directive when he made this observation but it is to the EU’s shame that it is so wedded to the principle of harmonisation that it fails to recognise that despite harmonisation being of benefit to the consumer in some areas, mortgages is not one of them.

In February, I attended a helpful briefing in Westminster about the proposed EU mortgage directive. This was given by Conservative MEP Vicky Ford, a shadow rapporteur.

Before the briefing, the notes said that members of the economic and monetary affairs committee were expected to vote on the report at the end of February.

However, Ford said that despite the vote having originally been scheduled for late last year, she expected it to be delayed further because there were “so many other more important things” for the committee to deal with. The vote has since been deferred twice and is currently scheduled for May 8.

Some EU countries with little or no mortgage regulation may welcome help from Brussels but the UK is in a very different place. The euro experiment is a classic example of the economic facts of life being ignored to satisfy political ideology. The negative impact of harmonising mortgage regulation will not be on the same scale but lessons should be learnt from such a massive harmonisation failure as the euro project.

The EU has been considering a mortgage directive since the mid- 1990s and, as Ford said, there are many more important things for it to spend its time on. The promoters of this flawed concept are so naive about the real world that they justify it by saying harmonising regulation throughout the EU will allow consumers to shop around for their mortgage in all 27 EU countries.

This is technically true but irrelevant. Even with an EU directive, different legal processes in relation to property and the multitudinous ways that information is provided by credit reference agencies (in those countries which have one) mean the only realistic way for a lender to operate outside their home base is to establish a subsidiary or branch in the country they want to operate in, which they can already do, provided they satisfy the regulatory authorities in that country.

Ray Boulger is senior technical manager at John Charcol



Arch cru fallout highlights FSCS broken model

One of the many concerning aspects of the Arch cru debacle is that IFAs who never touched the products will together fund more of the costs than the compensation package agreed last year by the fund range’s ACD Capita and two depositories. Announcing this week’s £110m consumer redress scheme, the FSA predicted up to 30 […]

Tenon cleared of unfair dismissal

RSM Tenon has been cleared of unfair dismissal of a former senior manager who accused the firm of false accounting. Duncan Swift, who was director at the Southampton office, said Tenon made him redundant after he blew the whistle on poor practices in its recovery division. Swift claimed he recognised revenues on insolvency contracts which […]

Out of Context

“I do not quite know what normality is.”Debt Management Office CEO Robert Stheeman “My hon friend tempts me towards a place I would very much enjoy going.”TSC chair Andrew Tyrie when asked why he thought the BoE is so reluctant to release its minutes “We are not responsible for monetary policy. Sometimes, in my dreams, […]


HSBC scraps tied advice service and axes 650 jobs

HSBC is axing its tied advice service in a move that will see up to 650 advisers lose their positions. The bank is keeping its whole-of-market advice and execution-only services. An HSBC spokesman says about 50 of the tied advisers will be given the opportunity to retrain and switch to its whole-of-market team, which currently […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm