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BSA Chairman upbeat about sector prospects

He also noted that "societies are based all over the country and provide employment in many regions of economic stress.  Their economic effect on other service businesses in their regions is immense and one the Government should seek to enhance".

Goodfellow criticised the "savage" nature of the Bank of England’s decision to cut interest rates to historically low levels.

"It seemed wrong to us to reduce interest rates so sharply, so quickly," he said. "Many societies were sympathetic to the plight of savers and felt it appropriate to look after the interests of, especially, their elderly investors who had saved for years in the expectation of living off their interest income, but found this income rapidly plummeting towards zero as the Bank implemented an aggressive rate cutting policy.

"We also questioned whether this policy would benefit the mortgage market or, rather, restrict the flow of funds available for mortgage lending even more than was likely to be the case as a result of other developments in the economy.

"In our view the interest rate cutting policy did not have to be quite so savage."

Looking to the future he acknowledged there were challenges that face the sector, but concluded: "We can all commit to the principle that all societies wish to see a strong mutual sector and will individually and collectively work to avoid any further failures.

"My final message is that we must hold on to the traditional values of building societies – not least putting the customer first – while at the same time not closing our mind to what might be seen as some revolutionary change in the current extraordinary circumstances."

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