Events
Speech
Chairman's Address to the BSA Annual Lunch 2008
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Contact: Christie Sharp Date: 14 Nov 2008 |
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Introduction
As ever it is the pleasant duty of the Chairman of the Association to welcome our guests to this lunch. After such a traumatic year, it is indeed a pleasure to see so many of you still here!
There is one particular guest that I would have liked to have welcomed, but for understandable reasons I am unable to do so. Caroline Flint, the former Housing Minister, had accepted our invitation to speak at this event. However, as you will all know she has been reshuffled to other responsibilities far removed from housing and I am afraid that it was just not possible for her replacement, Margaret Beckett, to take on this speaking arrangement. That means you will have to make do with me and, I am pleased to say, our sponsor. In a few moments it will give me great pleasure to introduce Gary Burchett, Managing Director of Housing at Legal & General, who I am sure will have a few interesting words for us.
Recent Developments
There is a fundamental inconsistency between the requirement placed on the Chairman of the BSA at this event to speak for just 15 minutes and the requirement to sum up the events of the past year, which would require a speech lasting around 15 hours. You will be pleased to hear that I am sticking to the traditional approach of giving a brief overview of events.
And what events! In the short period since the beginning of September, we have seen the nationalisation of Fannie Mae and Freddie Mac in the States, the move of Bradford & Bingley into public ownership in the United Kingdom, the government's announcement of a £400 billion support package available to both banks and building societies, the announcement of the potential partial nationalisation of Royal Bank of Scotland, HBOS and Lloyds TSB, the failure of the three largest Icelandic banks and their UK subsidiaries, a call on FSCS of up to a billion pounds for each of the next three years to cover interest payments on a government loan to meet FSCS liabilities to the Icelandic banks and Bradford & Bingley, and a drop in economic output for the first time in many years in the UK. No wonder Adrian Coles was quoted on the BBC website on 29 September saying that recent events had been “utterly, unbelievably, astonishing!”
More recently we have had the sharpest reduction in interest rates that anyone can remember. Indeed, Paul Lewis said on last Saturday's MoneyBox on Radio 4 that interest rates had never fallen by such a large percentage (33%) since the year after the Bank of England was founded, 1695. I haven't undertaken my own research, but I am sure that Paul is correct.
In the light of all of this I would like to highlight just three developments – the strength of the mutual model, the costs forced on prudent institutions by the FSCS bailout of imprudently run institutions, and the issues surrounding the so-called "passing on" of interest rate cuts to borrowers and – and this is often overlooked – to savers.
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