Building societies said to have snubbed bank body merger plan

According to Sky News, the Building Societies Association (BSA) wrote last week to Ed Richards, the former head of media regulator Ofcom, to oppose the idea that it could form part of a new representative body for banks.

The BSA, whose members include the Nationwide and Yorkshire building societies, was named by Richards in a preliminary report published earlier this year as a possible component in a future umbrella organisation.

But in a letter seen by Sky, the BSA’s head of mortgage policy, Paul Broadhead, said the idea had not been welcomed by the body's members.

"Having been fully out of scope in the original consultation, we were interested to note the inclusion of the Building Societies Association (BSA) in the latest iteration of the report under two of the models presented," Broadhead wrote.

"We have consulted fully, and in a range of forums, with the BSA membership and with the BSA Council (effectively our board).

"This consultation resulted in unanimous agreement that the BSA should not form part of any new entity due to the distinct nature of the sector, something that you recognised may be the case in your report.

"The building society sector is truly distinct from the banking sector, this includes corporate structure, legislative status and in some areas it is subject to additional layers of regulatory guidance."

Richards' review, which is likely to be completed later this year, has been driven by the biggest high street lenders, who believe there is scope to make financial savings and deliver more effective representation of key industry issues by reducing the number of trade associations.