Where's the cunning plan?

Well I failed to get a blog out in July, a month which saw the FSA launch their CP 10/16 Responsible Lending paper. My excuse was that I was on holiday at the time and when I was faced with trying to download a 186 page document onto a Blackberry in Portugal whilst sipping a glass of Vinho Verde I gave up.

I did see the industry response however, most of it hostile to the FSA.

I’m back now and have read it and have been able to consider my feelings.

In short there is nothing of any great surprise in the document so to that extent I don’t think the industry response was proportionate, as the FSA would say. Would I rather we didn’t have another slew of regulation to assimilate? Of course I would and so to that extent it doesn’t make me feel any better because it just isn’t going to help get the mortgage market back on its feet.

The problems the industry are facing have nothing to do with irresponsible lenders , borrowers or bad practices, regardless of how much of that actually went on, but a Global credit crisis and ensuing liquidity shortage which has not gone away. So to that extent the potential changes to regulation don’t make things worse at a macro level – they just give us a number of additional things we need to focus on. More importantly it doesn’t make it any better either.

Is this the FSA’s fault? Short answer has to be no!

So where does it leave us and where next for regulation?

What I think is missing from a policy perspective is what is the overall vision and strategy for the UK? What level of home ownership does David Cameron see as being the desirable for the UK going forward and is it consistent with the ‘aspirational views’ broadcast by his housing minister Grant Shapps? And do we really expect to have a vibrant market with masses of products, innovation and lenders to choose from? If we do then CP10/16 does little to further that aim given that its focus is on stable markets not supply and innovation. At some point I would love to see a clearly annunciated strategy and vision which the multipartite authorities are able to frame their policies and proposals around. We wouldn’t expect a company to operate without an overall strategic plan and business plan would we? Why should the economy be any different?