The mutual building societies have always been seen as safe and sometime boring institutions. Yet the government and its regulator seem intent on treating them the same as the more risky banks.
For example, the Financial Services Compensation Scheme is a finance industry scheme to compensate customers in the event of an institution becoming insolvent.
Because of the difficulties at the London Scottish, Bradford and Bingley and the Icelandic banks – all banks – the mutual building societies have been required to stump up £millions. Dunfermline Building Society’s share is £7.2m. This is not an insignificant sum especially during the current economic crisis and it has contributed to the difficulties at the Society.
Why should the Dunfermline be paying for someone else’s difficulties when they’ve got plenty of their own to deal with?
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If you did some research you would find that the total amount paid by all banks and buildings in 2008/09 was only £5m. So Dunfermline did not pay £7.2m and that did not contribute to them failing.
ReplyDeleteNo, your figure is for one year. The Dunfermline were required to pay £7.2m to the FSCS over the period. It was a factor.
ReplyDeleteBut they have not paid it yet. The FSCS only announced the total amount banks and building societies would have to pay on 30 March. They have not colleced £7.2m from Dunfermline. The building society may have estimated a commitment of £7.2m over the coming years but it has not yet paid anything beyond its portion of £5m. You might find this link helpful...http://www.fscs.org.uk/industry/latest_industry_news/2009/mar/Levy_2009_10/
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