After B&B fiasco, what about other BSs ie Principality

Lynt_3

I am concerned that as Bradford and Bingley have got into such difficulties, how other BSs will fare.
I have savings with Principality, which is smaller than B&B.
With housing market being so dire, will it be long before they are in trouble too?

It easy to become neurotic

baby_boomer

Bradford & Bingley wasn't a building society, it was a mortgage bank. As a result it had borrowed more money on the money markets than any building society, and taken more risks with its lending than BSs [although Derbyshire BS & Cheshire BS have recently been very stupid.]

Most savings institutions, banks or BSs, will use your money to lend, secured on the housing market. Many will also lend unsecured money [I gather this surprisingly includes Principality. BTW why did you include it in your title?] In a recession they don't get all of it back. In a recession plus house price crash they get even less back because repossessions cost them more.

Most savings institutions will have borrowed from other sources to fund their balance sheets. If those rolling funds dry up because of lack of confidence, or even just because of the credit crunch there is a problem.

Most savings institutions lend long (mortgages) but borrow short (savings and credit from the financial markets).

This situation is widespread - and therefore normal. [It's the background of the credit crunch that's abnormal]

So it's easy to become neurotic because none could survive a run on their bank by savers.

But it doesn't achieve much to panic [in fact it achieves the opposite of the desired situation] and there are government measures in place to protect your savings up to £35K if the worst comes to the worst.

And after NR, Halifax and B&B it's probably getting harder to predict the next one to fall. I wouldn't be suprised if the Sunday papers have a go, though!

fatpig_2

Not to worry, Nationwide BS has been given the job of saving ailing building societies.

Lynt_3

Thanks guys. Some comforting words.

It's difficult not to worry isn't it. I've stopped reading the papers
I'm not very experienced in this sort of thing, and it easy to believe everything you hear/read.

I never hear anything about Principality despite living in Wales.

Nick_C

Of course B&B used to be a Building Society until greedy members destroyed its mutuality, and greedy and inept managers then destroyed the plc.

Perhaps we will now cherish and support our few remaining mutuals.

ad44downey

What happened to Derbyshire BS and Cheshire BS then? Who's to blame for their demise? You can't blame greedy members for this, more like greedy mutual directors

MABLE

I have savings with the Bradford and Bingley and have been trying to access my account on line but continually unable to get through. You think it is safe putting it into savings account. I know we are protected up to £35k but just the inconvenience of it all.

I can see in time we will be asking the banks to fill out an application before we trust them with our savings so we can check on their financial situation.

ad44downey

MABLE wrote: »

I have savings with the Bradford and Bingley and have been trying to access my account on line but continually unable to get through. You think it is safe putting it into savings account. I know we are protected up to £35k but just the inconvenience of it all.

No, you're not. You're protected up to any amount as the government owns B+B now.

The reason you can't access their website is because thousands of people are needlessly panicking and trying to access the website at the same time as you!

cvd

What happened to Derbyshire BS and Cheshire BS then? Who's to blame for their demise? You can't blame greedy members for this, more like greedy mutual directors

However, as I pointed out in another thread, carpetbaggers have destroyed the ability of members to affect the direction and management of a building society - and by members, I mean members who want the society to succeed.

savetilibleed

ad44downey wrote: »

The reason you can't access their website is because thousands of people are needlessly panicking and trying to access the website at the same time as you!

Can't inderstand the panic, B&B was always going to be saved somehow, whether into public ownership or by another institution. Unless I suppose these people have lots more than the protected £35k. I have £20,000 in B&B internet saver and I only went to the account only to check something late in the day yesterday.

MABLE

ad44downey wrote: »

No, you're not. You're protected up to any amount as the government owns B+B now.

The reason you can't access their website is because thousands of people are needlessly panicking and trying to access the website at the same time as you!

Thanks for information but certainly am not panicing. I was trying to say I have an onlne account through my Egg management account and everytime I log on it brings all my accounts up except for Bradford and Bingley.