Bank Liabilities Survey - 2015 Q2

This quarterly survey of banks and building societies is aimed at improving our understanding of the role of lenders’ liabilities and capital in driving credit and monetary conditions.
Published on 13 July 2015

The 2015 Q2 survey was conducted between 22 May and 12 June 2015.


  • UK banks and building societies reported that total funding volumes had increased slightly in the three months to mid-June 2015. Over that period, retail funding volumes were reported to have been broadly unchanged. ‘Other’ funding volumes, which includes wholesale debt issuance, were reported to have increased significantly, with the net percentage balance the highest since the Bank Liabilities Survey began in 2012 Q4. Lenders expected total funding volumes to increase slightly further in 2015 Q3.
  • Spreads — relative to appropriate reference rates – on retail funding were reported to have fallen again in 2015 Q2 and were expected to fall further in Q3. Spreads on ‘other’ funding rose slightly in Q2 and were expected to be broadly unchanged in Q3.
  • The supply of deposits by households fell slightly in Q2, as it had done in Q1, and a further fall was expected in Q3. In contrast, the supply of deposits by firms was broadly unchanged in Q2 but expected to rise in Q3.
  • The proportion of wholesale market funding accounted for by long-term instruments increased slightly in Q2, and was expected to increase slightly further in Q3. Regulatory drivers continued to push up significantly on lenders’ demand for long-term wholesale debt issuance in Q2, with a significant increase in the proportion of long-term wholesale market funding raised through senior unsecured debt. While use of sterling wholesale debt markets had increased slightly in Q2, use of US dollar and euro markets had reportedly picked up more strongly, with the relative cost of funds, and differences in investor demand and market access all cited as significant reasons for the pick-up in non-sterling issuance.


  • Lenders reported that their total capital levels increased significantly in Q2, for the fifth consecutive quarter. They expected total capital levels to rise significantly again in 2015 Q3.
  • Lenders again cited regulatory drivers as the most significant factor increasing their demand for capital in Q2. Investor demand for capital instruments was reported to have fallen in Q2.

Transfer pricing

  • Lenders reported that the internal price charged to business units to fund the flow of new loans (the ‘transfer price’) rose slightly in 2015 Q2, having fallen each quarter since 2013 Q3. The slight rise in 2015 Q2 reflected increases in long-term wholesale funding spreads and a slight rise in reference rates. Lenders expected a further rise in the ‘transfer price’ in Q3.

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