§ Mr. BoatengTo ask the Chancellor of the Exchequer (1) what submissions he has received from the Building Societies Commission or building societies ombudsman on the subject of investment bond-related home income plans;
(2) if he has any plans to review the regulation of lending by building societies for (a) investment bond-related home income plans or (b) other lending; and if he will make a statement;
(3) what action he proposes to take over the involvement of certain building societies in providing mortgage finance for investment bond-related home income plans.
§ Mr. MaplesThe regulation of investment business, including investment bond-related home income plans, is a matter for the Securities and Investments Board and the relevant self-governing organisations. As regards the activities of building societies, the concern of the Building Societies Commission is to promote the protection of shareholders and depositors in societies. The prudential guidance to building societies on the subject of lending risks, and the corresponding capital adequacy requirements, were reviewed by the commission in consultation with the building societies during 1990 and set out in the prudential note on this subject in March 1991. Building societies have been required since March 1990 to provide additional capital to cover the risks associated with lending on a deferred interest basis, which is a feature of some equity release schemes. The commission has also recently required building societies to clarify and document their lending policies, which will assist in the maintenance of lending standards.