The FSA Financial Risk Outlook published in January 2003, highlighted a number of risks including that if the economic outlook deteriorated, the results could be hardship for consumers and increased credit risks for lenders.
Against this background the seminar brings together a number of different groups with an interest in the subject of borrowing including representatives from the industry, consumer organisations, and government.
The aim of the seminar is to begin to identify the key information and generic advice needs of consumers when they are borrowing and what actions can be taken to ensure gaps in that information or advice on borrowing are addressed.
The programme will include general sessions and discussion in smaller workshops looking at four specific issues: the impact of a change in the economic environment; personal circumstances; industry influences; and the regulatory framework.
Anna Bradley, FSA's Consumer Director, said:
"The recent rise in base rates should be a reminder to consumers of the risks they face with borrowing - when interest rates rise it may make existing borrowing less affordable.
"A mortgage is likely to be the biggest loan consumers take out. In the future, the FSA regime will ensure they receive clear information about the price of their mortgage. In the meantime to help consumers understand what might happen if interest rates continue to rise or they have a change in personal circumstances, we have published a new factsheet - You can afford your mortgage now, but what if…?
"Mortgages are however, just one form of borrowing, there are many others and they all have same risk to consumers – changes in the economic environment or personal circumstances of a consumer may make borrowing less affordable in the future. The FSA want to work with others to find ways of improving consumer understanding in this area and help to prevent problems arising in the future."
