Rebuke for new FCA boss ahead of launch day

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THE head of the new Financial Conduct Authority (FCA) has been rebuked by the chairman of the Treasury committee just days before the regulator’s launch.

Andrew Tyrie complained to Martin Wheatley, currently managing director of the soon-to-be-disbanded Financial Services Authority, about his response to concerns about the Bank of Ireland UK’s decision to double or triple rates on tracker mortgages.

Tyrie, publishing correspondence between the two, said: “Your response does not tell the committee whether you were concerned at the action of the Bank of Ireland, what assessment you have made of the impact of its decision might be on the rest of the industry, nor how the FCA would act in the event of lenders taking this sort of action in the future.”

Bank of Ireland UK sparked controversy last month by sharply increasing the percentage interest it charged over Bank of England base rates on its tracker mortgages.

The BoI cited a “special conditions” clause in the mortgages, saying the cost of funding them had leapt since 2008.

Wheatley, who takes on his new post on Monday, said in his earlier letter that the FSA had reviewed the terms of the relevant mortgages “and did not identify any concerns which led us to believe the terms may be unfair”.

Tyrie said yesterday he felt that the regulator needed to have thought carefully about the issue, and ensure customers were treated fairly. “Mr Wheatley’s letter appears to fall short on both counts”, he said.

MARTIN FLANAGAN