More to interest rate margins than appears to be the case at first sight

The cost of mortgage funding and swap rates have hit the headlines recently, but is the criticism of lenders - that they are widening their margins to the disadvantage of customers - really fair?

Swap rates are certainly one issue affecting the price of fixed-rate mortgages.  Typically, the swaps would be used by mutuals (and banks) to hedge a risk.  In very simple terms, a building society, for example, might raise variable-rate funding and wish to use that to finance fixed-rate mortgage lending.  Clearly there is a risk, if interest rates rise, that the building society will suffer a significant loss – it will have an increased cost of deposits, but no increased income from its mortgages.  That risk can be reduced or eliminated by swapping, in the specialist wholesale money markets, the variable interest rate liability on the deposit for a fixed interest rate liability, matching the fixed interest income on the mortgage. 

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BSA at Party Conferences 2010

Mutuality and diversity in financial services will be on the party conference agenda this year as the BSA is running events at all three of the main political party conferences. 

At a series of events entitled Mutual financial services - how can financial services work in the public interest? The BSA, along with The Association of Financial Mutuals, The Association of British Credit Unions and The Co-operative Financial Services will debate diversity in financial services.

For full details click here

The New Mortgage Landscape : Responsible, ethical, profitable lending

How can mutual lenders overcome the key challenges of ensuring that their businesses are profitable while at the same time responding to increased focus on the fundamental principles of lending, yet also retain the unique ethical standards that characterise the sector?

Join mortgage professionals from a wide range of organisations to debate these issues at the BSA's "The New Mortgage Landscape : Responsible, Ethical, Profitable Lending" event on 20 October, sponsored by the Water Industry Property Information Network.

Click here for more details

Times 100

Over the last three years, the BSA has supported The Times 100 in preparing case studies for business studies students.  Available online and in print, the case studies are sent to all 5,600 secondary schools, colleges and universities in the UK and aim to teach students how major organisations deal with business issues. 

The Association has contributed to case studies on the different types of organisations in financial services, the importance of effective communication, and to be published shortly, the business cycle.  There were over 100,000 downloads of the most recent case study by students and over 500,000 downloads by teachers.

BSA welcomes new Associate

Joseph & Hepple-Wilson (J&H-W) have joined the BSA as an Associate.   J&H-W are regulatory and risk advisers; specialist areas include applications for FSA authorisation, support for ARROW and other FSA visits, corporate governance advice, process & operational risk management and ICAAP reviews. 

To find out more about them, visit their website - www.jh-w.com/