The Building Societies Association, as the representative body for all 43 UK building societies as well as six of the larger credit unions, is delighted to contribute to the Ring-fencing and Proprietary Trading Independent Review's call for evidence.

Ring-fending as a structural constraint on large banks is relatively new.  We believe that the experience of the building society sector, which has had its own current structural limits set out in statute for almost 40 years, shows that the effects of such constraints are best demonstrated over the long term.  Of course, the legislation must be periodically reviewed and modernised - while keeping its original intention and spirit - to reflect changes in the wider world and to enable firms to compete on a fair basis to meet society's needs.

However, if there are unintended consequences of ring-fencing, notably on competition, for now these may be better addressed by applying the existing powers of other regulators rather than via changes to ring-fencing laws or regulation.

Read the full submission here