The withdrawal of lenders offering interest-only may limit consumer choice, said the incoming CEO of the twin-peaked Financial Conduct Authority, which took over from the FSA yesterday.
The regulator's first ever risk outlook paper out last week said many lenders had failed to fully assess ways of offering interest-only before withdrawing from the market, fearful of retrospective regulatory action. The regulator said: "While withdrawal from a product or market creates an opportunity for niche firms, the gap between withdrawal and the establishment of the niche market can leave consumer choices limited." He added a lack of strategic thinking under broader pressures may have been the reason for these withdrawals. "This could lead to precipitous withdrawal of firms ...
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