Mandy Spink, head of mortgages and credit unions in the small firms division, as well as an unspecified number of the mortgage team, will be part of the investigation, meaning they could be absent from the division until March.
Robin Gordon-Walker, spokesperson for the FSA, insisted that its work would be unaffected.
“Whatever moves there are between teams, there will be many other people at the FSA to step into their roles. We’ve got lots of people in other areas of the small firms division who can move across and this will only be temporary. There will be enough resources to make sure all the needs of small firms are covered.”
However, one source questioned the wisdom behind redeploying members of a key department, especially with the ‘Treating Customers Fairly’ deadline – a major issue for smaller brokerages – on the horizon.
The source said: “There was a lot of positive stuff being done in that area and now this has been hung up for the time being. The FSA has got to make sure it doesn’t get sidetracked by the Northern Rock issue. A lot of expertise in the small firms division has now disappeared – will those replacing them have the same knowledge?”
Richard Fox, chief executive of the Society of Mortgage Professionals, believed a period of stability was currently essential.
He explained: “This is happening at a time when the regulator has got to be right up to the mark as the market cannot afford another bad news story. There has been too much negativity recently and we need a period of stability for both the public and the wider mortgage industry.”
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