The Bank of England (BoE) has published a speech given last week by Deputy Governor Andrew Bailey at the Building Societies Association Annual Conference, which included BoE’s impressions of the state of the building societies sector as a whole and the PRA’s approach to the governance of firms.
- Key indicators for the sector were positive, including an improving net interest margin, low rates of arrears and strong net new lending.
- There exists a potential for margin pressure owing to heightened competition in the mortgage market, which may tempt lenders to seek higher returns through riskier loans.
- Appropriate mitigation of cyber risk and IT systems risk were an important focus of BoE.
- It will consult on changes to the Building Society Sourcebook later this year.
Further details of the speech can be found here.