Addressing the BSA’s annual lunch in London, Griffiths emphasised that, with 25m members across the UK, mutuals offer crucial diversity and choice in the financial services market, underpinning financial stability and reducing systematic risk.

He highlighted that the government has pledged in its Programme for Government to promote mutuals and create a more competitive banking market, but said it must give the mutual sector the tools to do the job.

Griffiths said: “Those tools are proportionate regulation, access to capital and support from the major investment institutions to help us with innovative financing schemes to help the housing market.”

He said that a new instrument structured for mutuals could promote more lending into the market, while meeting additional capital requirements and replacing old, now non-compliant, capital such as PIBS.

He maintained that new capital could have helped to return Northern Rock to mutual ownership, something that was in the long-term interests of the taxpayer if set against a discounted sale back to the PLC sector.

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Griffiths added: “One-size-fits-all regulation that sees simple savings and loans businesses treated the same way as systemically complex and inherently riskier firms is both costly and counter productive.

“Gold plating is a great British trait as is common sense and our plea is for the latter.”

However, on the government’s housing policy, Griffiths said: “A bit like my old school reports, we would simply say ‘could do better’.”