Ms Derville Rowland:

We have been doing on-site inspections throughout the tracker mortgage examination. These have been structured in a particular way. The scale of the job that we are doing is very unusual. It is of a vast scale and there is a particular approach that needs to be taken to get this type of work done and done accurately. This involves pressing into service other people's resources. I referred earlier to a core part of supervision being trust but one also needs to verify. Everything must be checked by authorised officers going on site, acquiring files, checking each page, and verifying them. They then also check the accounts the banks say were not affected to ensure that is the case. One tests the perimeter of all decisions. We have only done announced, on-notice, on-site inspections. I recall us having this conversation at a previous meeting. I will try to clarify why we do announced inspections. It is obvious to us as regulators and to any other regulatory agency that there is a clear and useful role for unannounced inspections. These are typically carried out when it is feared there will be flight, destruction of documents, obstruction and so on. We would be as cognisant of this as any other regulatory agency. However, there are times when one cannot get access to files unless all of the work is lined up. If I want to examine 100 particular files and I need to get my work done in a scheduled way, I need the right people made available to me to ask questions and take notes and I have to inform the entity of the proposed inspection to ensure that the access permissions I need to particular areas and the paperwork ordered are made available to me. I have to ensure the people of whom I need to ask questions are made available to me so that I can be effective on site.

We do a combination of on-site, off-site and desktop inspections. If we needed to do unannounced inspections, we would do those too. We always take cognisance of the situation in which we find ourselves. Some people answer questions better than others and one might think some people are being deliberately unhelpful, obtuse and so on, but that is different from fear of destruction of documents. A feature of our work is on notice and it is appropriately done. If that was not appropriate, we would do something else.