Speaking at the Association of Mortgage Intermediaries annual dinner at Drapers’ Hall in London last night, the Labour MP for West Dunbartonshire said the industry should pull together and get ahead of the curve so that good self-regulation could prevent the need for heavy-handed legislation.
He said: “Legislation solves nothing. Legislation is always behind the curve.”
He added: “I would like to see people from the industry on secondment to the FSA, not only at a junior level but at a senior level. The real intelligence of what is going on in the industry is held there.”
McFall said this kind of industry expertise could help the regulator spot business models that are out of kilter as Northern Rock’s was.
McFall reiterated his proposal for a single State bank, arguing that this would have allowed the Government to get credit flowing directly to individuals and small businesses as he said banks face conflicting interests because of their need to preserve capital.