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Where has the financial services industry gotten itself to in these past two decades or so? I have just been reading the Financial Services Authority's proposals regarding the reform of the mortgage market in the UK. What on earth has happened to basic lending principles?
The FSA speaks of a changed approach to a more "intrusive and interventionist style of regulation". As a part of these proposals they set out what they refer to as "key features", six in all.
But of the six, three should, as a matter of course, be part and parcel of a bankers' normal business practice. A regulator should not have to tell a bank what the basic principles of lending money are. Just consider the three following "key features";
There should be absolutely no need to tell a banker, never mind make it a regulation, as to what the basic principles of lending money are. Unless of course the lenders aren't really bankers! This of course begs the question as to why these people are even allowed to be in the business of lending money in the first place? These "banks" have obviously thrown all caution and prudential behaviour to the wind in their pursuit of market share and profits.
A few days ago I railed in a previous Blog on Finextra against a new range of obscene staff bonuses to be paid by Goldman Sachs ("Is this just a Bad Dream?" https://www.finextra.com/blogs/fullblog.aspx?blogid=3438 ). I wondered there whether I had awoken in "Alice in Wonderland". Now I know I have, and I am at the Mad Hatters' Tea Party.
Good luck to the Financial Services Authority in what they are trying to achieve.
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Nick Green Director at Purple Patch Broking Ltd
22 August
Oleg Stefanet Chief Risk Officer at payabl.
20 August
Venkatesh P Co-Founder and Director at Maveric Systems
19 August
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