Bank Liabilities Survey - 2019 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 18 July 2019

 This report presents the results of the 2019 Q2 survey. It was conducted between 3 and 21 June 2019. Find out how to interpret this survey.


  • UK banks and building societies reported that their total funding volumes increased significantly in the three months to end‑May 2019 (Q2). Within the total, ‘other’ funding — which includes wholesale debt funding, wholesale deposits and funding via central bank operations — was reported to have increased, while retail deposit funding was reported to have increased significantly (Chart 1). Lenders expected total funding volumes to remain unchanged in the three months to end‑August 2019 (Q3).
  • Spreads — relative to appropriate reference rates — on ‘other’ funding were reported to have decreased in Q2, while spreads on retail deposits were reported to have increased slightly (Chart 2). Lenders expected spreads on ‘other’ funding to remain unchanged, however retail deposit spreads were expected to decrease significantly over the next quarter.
  • Lenders reported that the supply of deposits from households increased significantly in Q2, and was expected to increase over the next quarter. The supply of deposits from private non‑financial corporates was reported to have increased slightly in Q2, and was expected to remain unchanged in Q3 (Chart 3).
  • The proportion of wholesale market funding accounted for by long-term instruments was reported to have remained the same in Q2 but was expected to increase significantly in Q3.
  • Investor demand for banks’ wholesale debt increased significantly in Q2 (Chart 4). Lenders expected a slight decrease in the demand for wholesale debt in Q3.


  • The average cost of capital was reported to have decreased significantly in Q2 and was expected to remain unchanged in Q3.
  • Lenders reported that their total capital levels remained the same in Q2, but were expected to decrease slightly in Q3.

Transfer pricing

  • Lenders reported that the internal price charged to business units to fund the flow of new loans (the ‘transfer’ price) had decreased in Q2 (Chart 5). This was reported to have been driven by a significant decrease in long‑term wholesale funding spreads (Chart 6). Lenders expected no change in the transfer price in Q3.

How to interpret this survey

The results are based on lenders’ own responses to the survey. They do not necessarily reflect the Bank’s views on developments in bank liabilities. To calculate aggregate results, each lender is assigned a score based on their response. Lenders who report that conditions have changed ‘a lot’ are assigned twice the score of those who report that conditions have changed ‘a little’. These scores are then weighted by lenders’ market shares. The results are analysed by calculating ‘net percentage balances’ — the difference between the weighted balance of lenders reporting that, for example, demand was higher/lower or terms and conditions were tighter/looser. The net percentage balances are scaled to lie between ±100.

In this report, changes in balances are described as ‘significant’ if greater than 20 in absolute terms, as ‘slight’ if between 5 and 10 and as ‘unchanged’ if less than 5.

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