BSA Responds on Building Society Capital
The BSA has submitted its response to the Treasury’s Discussion Paper on building society capital and related issues, detailing how building societies could develop a new form of Tier 1 capital, that fits the mutual model, if the right outcome is obtained in a forthcoming EU directive.
Jeremy Palmer, Head of Financial Policy, BSA commented:
‘We welcome the Treasury’s clear appreciation of, and support for, the mutual sector. However, some challenges remain. Proposed international core capital criteria are not currently compatible with the mutual and co-operative model, as commentators increasingly recognise. We are calling for the Treasury, which has direct responsibility for the EU Directive (CRD 4) negotiations, to help secure the right outcome at a European level on the issue of capital for the mutual sector.’
‘The DP confirmed that building societies should be treated with parity of esteem, and sensitivity to the mutual business model. We welcome this as the right starting point for any consideration of building society capital.’
The BSA will continue its dialogue with the Treasury on the European negotiations on CRD 4, and the ongoing development of a new Tier 1 capital instrument that fits the mutual model.
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Contact
Fiona Cornes – fiona.cornes@bsa.org.uk / 020 7520 5926
Notes to editor
1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 50 UK building societies. Mutual lenders and deposit takers have total assets of over £370 billion and, together with their subsidiaries, hold residential mortgages of over £235 billion, 19% of the total outstanding in the UK. They hold almost £250 billion of retail deposits, accounting for just under 22% of all such deposits in the UK. Mutual deposit takers account for about 36% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
2. Photographs of Jeremy Palmer are available from the BSA press office, or from the Association’s website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk
3. A copy of the BSA’s response can be found by following this link http://www.bsa.org.uk/policy/response/capital_related_issues_response.htm
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