Bank Liabilities Survey - 2017 Q4

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 11 January 2018

The 2017 Q4 survey was conducted between 20 November 2017 and 8 December 2017.


  • UK banks and building societies reported that their total funding volumes increased in the three months to mid-December 2017. Within the total, retail deposit funding was reported to have increased slightly, while ‘other’ funding - which includes wholesale debt funding, wholesale deposits and funding via central bank operations — was reported to have increased (Chart 1). Lenders expected total funding volumes to increase further in 2018 Q1, driven solely by ‘other’ funding.
  • Average spreads — relative to appropriate reference rates — on the stock of retail deposits from households and private non-financial corporations were reported to be unchanged in Q4 (Chart 2). Spreads on ‘other’ funding were reported to have fallen for the sixth consecutive quarter. Lenders expected average retail deposit spreads to increase slightly in Q1, while those on ‘other’ funding were expected to remain broadly unchanged.
  • Lenders reported that the supply of deposits from households continued to fall in Q4, with a further reduction expected in Q1. The supply of deposits from private non-financial corporates increased significantly in Q4, however (Chart 3).
  • The proportion of wholesale market funding accounted for by long-term instruments was reported to have increased significantly in Q4. Regulatory drivers and investor demand contributed to comparatively higher issuance of long-term debt, while the price/yield of instruments was reported to be pushing up on demand for both short and long-term wholesale debt.
  • Investor demand for banks’ wholesale debt was reported to have increased slightly in Q4, although lenders expected it to decrease slightly in Q1.


  • Lenders reported that their total capital levels increased significantly in Q4 (Chart 4), with changes in balance sheet size having increased demand for capital.
  • The average cost of capital was reported to have been unchanged in Q4, but was expected to increase in Q1. If realised, that would be the first increase since 2016 Q1.

Transfer pricing

  • Lenders reported that the internal price charged to business units to fund the flow of new loans (the ‘transfer’ price) had increased in Q4 — the first increase since 2016 Q2 (Chart 5). This was reported to have been driven by a significant increase in swaps or other reference rates (Chart 6). Partially offsetting this, spreads on new retail deposits and wholesale funding were reported to have fallen. Lenders expected a further rise in the transfer price in Q1.

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