On the second day of the Building Societies Annual Conference in Liverpool (5 May 2022), BSA Chief Executive, Robin Fieth, spoke about important themes for the strategic agendas of BSA member boards. 

 

In the context of the huge events experienced in the last decade, including a financial crisis, global pandemic and Brexit, from which building societies and credit unions have continued to go from strength to strength, Robin shared his thoughts on a number of challenges and opportunities that lie ahead, including those relating to climate change and Net Zero 2050. 

 

“Talking last month about balancing the zero-carbon tightrope, yesterday’s keynote speaker, Sarah Breeden from the Bank of England, highlighted some of the potential unintended consequences along the route to 2050.

 

“In our mutual world of savings and mortgages, one stands out for me in particular – our version of the investment managers’ strategic question.  Do we green our own balance sheets by restricting new lending to homes and properties that achieve the magic, if flawed, EPC A to C rating?  Or do we invest in the UK’s overall just transition to Net Zero by working with households to reduce their carbon emissions?  Do we in fact put the greatest emphasis and direct the greatest effort to supporting those living in the oldest and the energy-leakiest properties?

 

“I have cautioned our regulators on a number of occasions to take steps around climate change stress testing and regulation very sensitively.  To be wary that when regulators whisper, large parts of the regulated market jump.  The only question is how high.

 

“Collectively, in partnership with government and both prudential and conduct regulators, it is beholden on us all to seek to navigate this route such that we do encourage householders and landlords to invest in clean energy and greater energy efficiency.  And that we do all we can to avoid creating swathes of new mortgage prisoners, trapped in energy inefficient homes that are falling in value.

 

“Government needs to take some big steps – such as determining the future of the natural gas grid.  We need to take lots and lots of small steps to help the transition happen as fairly, as cost effectively and as smoothly as possible.

 

“And let’s recognise that there is no clear right answer to Net Zero transition.  Some paths will be more optimal, some less so.  Some technologies will be intermediate, some more enduring.  Honesty here is critical to allaying fears about conduct and mis-selling minefields, drawing the clear distinction between the practices and behaviours of rogue firms designed to rip customers off. and products and solutions sold in good faith which might, with the benefit of hindsight, prove to be sub-optimal.

 

Other themes that Robin discussed in his speech were the Future Financial Services Framework Review; regulation of diversity and inclusion; digital currencies and super-computing to quantum computing. A copy of the full speech is available on request.

 

1. A copy of the full speech is available here and Robin Fieth is available for interview.  Please contact  Hilary McVitty or Katie Wise .

2. You can view the speech by Sheldon Mills, Executive Director, Consumers and Competition, delivered at the Building Societies Annual Conference here

2. The Building Societies Association (BSA) represents all 43 UK building societies, as well as 6 credit unions. Building societies have total assets of over £477 billion and, together with their subsidiaries, hold residential mortgages over £351 billion, 23% of the total outstanding in the UK. They hold over £328 billion of retail deposits, accounting for 18% of all such deposits in the UK. Building societies account for 40% of all cash ISA balances. They employ approximately 43,000 full and part-time staff and operate through approximately 1,380 branches.

 

Hilary McVitty, Head of External Affairs, 07741 984 042 hilary.mcvitty@bsa.org.uk 

Katie Wise, External Affairs Officer, Tel: 020 7520 5904, katie.wise@bsa.org.uk