Graham Beale urged politicians "to deliver on their election pledges with concrete actions" in a speech to delegates at the trade body's annual conference in Manchester.

The Liberal Democrats have promised to return Northern Rock to the mutual sector if they gain power tomorrow, while Labour added the proposal to its election manifesto, saying that it would consider a mutual solution in plans for the sale of the bank.

Experts have expressed concerns about the feasibility to turning Northern Rock back into a mutual, arguing that such a move could come at a cost to the taxpayer, without fulfilling the goal of getting a maximum value for money from the sale.

One possible answer is the sale of Northern Rock to one of the UK's larger building societies, such as Nationwide or Yorkshire.

Last year Northern Rock was divided into a "good" bank, Northern Rock plc, and a "bad" bank, known as Northern Rock Asset Management. The separation was seen as preparation for an expected sale of Northern Rock plc to the private sector later this year.

Mr Beale also used the speech to call on the Conservatives party to support the sector. "The Conservative Party sees mutuality as the way forward within public services and pledge to support co-operatives and mutualisation as a way of transferring public assets and revenue streams to public sector workers; essentially employee-led co-operatives. I hope that the Conservatives will extend their support for mutuals in public service delivery to the financial services industry."

The chairman warned that the flurry of recent financial regulation in the wake of the global financial crisis will feed into higher borrowing costs and lower returns for customers. "There is a real danger of regulatory overshoot the full consequence of which...will almost certainly result in increased costs to consumers," he said.

He also highlighted the struggle the mutual sector faces complying with new capital adequacy rules being imposed by the EU and the Financial Services Authority (FSA) in the UK. Building societies have used a capital raising instrument called permanent interest bearing shares (PIBS) in the past to raise equity after the credit crunch and the resulting financial crisis battered balance sheets. However, the FSA insists that PIBS will not comply with tough new EU rules on capital requirements, meaning building societies will have to raise capital by other means.

Mr Beale said in his speech that the BSA had "a strong legal opinion" in support of PIBS and warned against the use of profit participation deferred shares (PPDSs), another type of capital instrument which hands over future profits to shareholders, threatened the mutual model.