A series of Building Societies Acts between 1836 and 1962 set out the statutory framework under which building societies could operate and gave increasing powers to the Chief Registrar (hereon the “Registry”). Unsurprisingly, and in common with other financial services regulation, these additional powers were often introduced as a result of scandal or crisis in the sector. 29  BSA Building Society Fact Book 1984 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  By 1960, the Registry had the power to call for an inspection of a society, to prevent it from taking deposits and to prohibit it from advertising. During this period, the Registry operated a legalistic framework; indeed, it was a statutory requirement until the late 1970s that the Chief Registrar and the two Assistant Registrars were lawyers. Only following the failure of Grays Building Society in 1978 (where all societies made good the losses that would otherwise have been suffered by Grays’ retail depositors) did we see the first appointment of a non-lawyer as Chief Registrar. With that, a new approach to supervision was adopted, comprising more frequent visits to societies, the receipt of more regular, better quality information from societies, and the recruitment of additional staff to undertake these enhanced supervisory activities. The role of the Registry also evolved to reflect the market conditions of the day.
Indeed, in its first report to Parliament, the BSC made clear that it would complete the shift in supervision (already underway at the Registry) from a 31  reactive approach “to the more positive and forward-looking approach” . In practice, all societies were visited at least once a year (4 or 5 times for the larger ones). There was an annual review meeting with the board; a report would be prepared with the supervisor’s assessment; a letter would be sent to the board outlining actions to be taken forward by the society; management information and strategy documents were reviewed, regulatory returns monitored, and mergers scrutinised. Insurance supervision The other major part of the PRA’s supervisory responsibility is the oversight of insurers. Here our heritage, as for building societies, is from outside the Bank. Indeed, despite the practice of insurance extending all the way back to the era of Babylon, it is only in the past four years that the Bank has played any role in supervising the sector. I will cover this more briefly, only because I have already given a speech devoted 32  entirely to this topic . th  Up until the 19 century, insurers were largely self-regulating and bound by the principle of “freedom with publicity”, the idea that regulation was unnecessary as long as some element of disclosure existed to encourage market discipline. This all changed when the Albert Life Assurance Company went under in 1869 and, in response, the Life Assurance Companies Act 1870 was introduced.