Bank Liabilities Survey - 2018 Q3

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 October 2018

The 2018 Q3 survey was conducted between 20 August and 7 September 2018.


  • UK banks and building societies reported that their total funding volumes increased significantly in the three months to end-August 2018 (Q3). Within the total, ‘other’ funding — which includes wholesale debt funding, wholesale deposits and funding via central bank operations — was reported to have increased significantly. Retail deposit funding was reported to have increased as well (Chart 1). Lenders expected total funding volumes to increase slightly in the three months to end-November 2018 (Q4). Retail deposit funding was expected to increase significantly, but ‘other’ funding was expected to decrease significantly.
  • Spreads — relative to appropriate reference rates — on ‘other’ funding were reported to have increased significantly in Q3, while spreads on retail deposits were reported to have fallen slightly (Chart 2). Lenders expected spreads on retail deposits to increase and ‘other’ funding spreads to increase significantly over the next quarter.
  • Lenders reported that the supply of deposits from households remained unchanged in Q3, and was expected to remain unchanged over the next quarter. The supply of deposits from private non-financial corporates was reported to have fallen slightly, but was expected to increase in Q4 (Chart 3).
  • The proportion of wholesale market funding accounted for by long-term instruments was reported to have remained unchanged in Q3 but was expected to increase significantly in Q4.
  • Investor demand for banks’ wholesale debt was reported to have decreased in Q3 (Chart 4). This was mainly driven by lower demand from retail investors, insurance companies and pension funds, and other asset managers. Lenders expected another fall in the demand for wholesale debt in Q4.


  • Lenders reported that their total capital levels increased significantly in Q3. This was due to the direct effects of profits, losses, deductions and charges. The total level of capital was expected to remain unchanged in Q4.
  • The average cost of capital was reported to have increased in Q3 and was expected to increase significantly in Q4.

Transfer pricing

  • Lenders reported that the internal price charged to business units to fund the flow of new loans (the ‘transfer’ price) had increased significantly in Q3 (Chart 5). This was reported to have been driven by an increase in long-term unsecured wholesale funding spreads and an increase in swaps or other reference rates (Chart 6). Lenders expected an increase in the transfer price in Q4

PDFBank Liabilities Survey - 2018 Q3