REGULATORY

FCA thematic review of mortgage advice

The Financial Conduct Authority has published a thematic review (TR15/09) on the quality and suitability of mortgage advice provided by firms in light of implementation of the Mortgage Market Review (MMR) and a report looking at consumer expectations of the mortgage process. While the FCA considers that there is no systemic issue there is room for improvement. The FCA will work with firms to implement MMR standards fully. It will  also undertake a market study in 2016 to look at barriers to competition and will continue to work on its responsible lending review which begun in April 2015. 

Financial Conduct Authority, 9 July 2015

FCA appoints new Director of Supervision – Retail and Authorisations

The Financial Conduct Authority (FCA) has announced the appointment of Jonathan Davidson as their new Director of Supervision – Retail and Authorisations.  He is currently a senior advisor to private equity and financial services firms and is also a member of Jardine Lloyd Thompson’s Strategic Advisory Group. He was previously the Chief Operating Officer at Direct Line.

Financial Conduct Authority, 7 July 2015

UK

PRA implementation approach to future FPC directions on housing tools

The Prudential Regulation Authority has published a statement on its intended approach to implementation of future Financial Policy Committee (FPC) directions on loan to value and debt to income ratio limits. In the event, the FPC exercises its powers,  the PRA's expected approach will be based on the framework established to implement the FPC’s 2014 Recommendation on loan to income ratios in mortgage lending on which it has previously consulted. 

Bank of England: PRA, 10 July 2015

PRA consultation on implementing UK leverage ratio framework

The Prudential Regulation Authority has published a consultation paper (CP24/15) on implementing a UK leverage ratio tools framework. This is at the direction of the Financial Policy Committee (FPC) and it is proposed, among other matters, that firms in scope will have to meet a minimum leverage ratio requirement and will need to consider whether they hold Common Equity Tier 1 that is greater than or equal to their countercyclical leverage ratio buffer (CCLB).  The consultation runs until 12 October 2015 and it is intended that the direction will enter into force on 1 January 2016. 

Bank of England: PRA, July 2015

Review of budget

The Conservatives have given their first independent Budget since the election, and both the British Bankers' Association and The Council of Mortgage Lenders have responded to the announcements over amending the bank levy and changes to the "Support for Mortgage Interest" programme which will change from a benefit to a loan in 2018. 
HM Treasury, BBA & CML, 8 July 2015

EU

EBA consultation on conditions for capital requirements for mortgage exposures

The European Banking Authority has published a consultation (EBA/CP/2015/12) on draft regulatory technical standards on the conditions that competent authorities must take into account when determining higher risk weights, in particular the term of 'financial stability considerations' under Article 124(4)(b) of the Capital Requirements Regulations (575/2013) and the conditions that competent authorities are to take into account when determining higher minimum "loss given default " or LGD values under Article 164(6) CRR. This is relevant for retail exposures secured by residential or commercial property. The closing date for comments is 6 October 2015. 
European Banking Authority, 6 July 2015