Dunfermline BS Stability

Trollfever

I know it is April 1st, but

Lord Myners told the Lords economic affairs committee the FSA would need more resources to become a more effective regulator, and needed to understand the financial markets better.

:T

baby_boomer

I could almost get to like the guy. It's quite refreshing. Not as good as a new broom, but much better than Darling & Brown forever saying how they had "done the right thing".

And another interesting point from the Herald article

"...Lord Howe said the crisis at the Dunfermline had highlighted the "unwisdom" of replacing the Building Societies Commission with the "giant" FSA – an all-embracing rather than "purpose-built" watchdog...."

## - Although the way things are going, we won't need a Building Societies Commission but a "Nationwide BS Commission" :rotfl:

baby_boomer

wrote:

Express - The SNP leader Alex Salmond goes a-spinning

He's due to make a statement to the Scottish Parliament today.

The local press is lapping up his version without explanation or qualification so that the Scots will think that it cost £1.6bn NOT to save the Dunfermline and local jobs

"....The Treasury paid £1.6 billion to Nationwide as part of the deal, effectively as compensation for liabilities not covered by Dunfermline's assets...."

## - Most of which the Treasury will get back from the sale of those assets, and much of the remainder from the hard suffering UK saver via the FSCS.

Count_Dante

I wonder what the Dunfermline Press will have to say about it tomorrow. Last week they had nothing to say over and above what the other papers said. They must have been surprised that their headline wasn't going to be a variant of 'Woman complains about local school' or 'Drunk man commits act of foolishness', and that a major local story had arrived. I wonder if they will say that the 'government pays Nationwide £1bn to get Dunfermline, when loan for £60m could have been made to save it', or will it be more intelligent analysis?

Count_Dante

From yesterdays Scotsman, regarding the societies annual reports (sorry if someone already posted). Good stuff:
http://news.scotsman.com/uk/Bill-Jamieson-Society39s-annual-reports.5123642.jp

The Dunfermline is a grotesque example of how an annual report can "tick all the boxes" and drip with corporate governance – but still hide a £900 million misadventure. That depositors were kept in the dark is a true scandal.

I hope Jim Faulds gets shamed like Fred Goodwin for putting his name to such drivel. He took the mickey out of members.

baby_boomer

Daily Record - Salmond slams the handling of the Dunfermline rescue

"The rescue of the Dunfermline building society could have seen a better outcome if the process had been "more orderly", First Minister Alex Salmond said today.

He told MSPs that the Scottish Government was ready to put in s25 million to help save the mutual.

But he hit out at the "difficulty" in getting information from the Financial Services Authority (FSA) about the amounts needed to secure the Dunfermline and the process which led to its downfall.

The Treasury paid s1.6 billion to Nationwide as part of a rescue deal, effectively as compensation for liabilities not covered by Dunfermline's assets.

The Dunfermline found it "impossible" to obtain dialogue about its future through the arrangement involving the Bank of England, FSA and the Treasury, Mr Salmond said.

"Throughout this process the Dunfermline building society seemed to be the last people to hear of their fate," he told MSPs.

"If the process had been more orderly, I believe it could have produced a better outcome for the members of the society, for the headquarters staff of the Dunfermline and for Scotland."

As well as the Scottish Government's s25 million injection, a consortium of seven building societies was ready to inject up to s30 million, Mr Salmond said in a statement to the Scottish Parliament today.

His officials were in "constant contact" with the FSA and Treasury to reach a positive conclusion.

But he added: "It was extremely difficult to obtain from the FSA information on the level of capital required."

Mr Salmond said that the society had accumulated over s100 million in reserves to satisfy FSA rules. The requirement was originally s20 million - but had gone up "significantly" in light of changing market conditions.

The FSA wrote to the Dunfermline on Saturday afternoon to "effectively instruct the directors" to meet and vote through a special resolution, Mr Salmond said.

The other building societies were also told on Saturday morning that "no public money was available" for investment in the Dunfermline.

"Given that our offer of investment was still on the table, I have written to Lord Turner to question whether the FSA's letter provided a full and accurate account of the position," Mr Salmond told MSPs.

There will now be "abiding concern" about retaining functions at the Dunfermline HQ in Fife.

But Mr Salmond admitted the responsibility for the society's plight lay with "the management of that institution, present and particularly recent past".

The Scottish Government now wants to see the case which saw the Treasury decide to break up the society on "value for money" grounds.

"We have requested, but have yet to see, the details of that case," he added.

And although an initial payment of £1.6 billion has been made to Nationwide by the Treasury, Mr Salmond noted that "informed observers" [:rotfl: the power of Peston] have claimed this could fall to as little as s10 million..........."

Scottish New Labour obviously doubted whether the First Minister actually had a viable alternative solution.

baby_boomer

Dundee Courier - Regret at Societies break-up

More queries about the process, and the extremists in the SNP have their say

".....Central Fife SNP MSP Tricia Marwick told Mr Salmond of the anger in Fife at the deal, which she described as “asset stripping by the UK Labour government in London.”

Later the first minister said, “I don’t think it would be just Fifers who would be furious.”.................

..................Scottish Tory leader Annabel Goldie said an impression had been created of “chaotic” communications between the Scottish and Westminster governments—and between Westminster and the Dunfermline itself.

“What was the agreed communication route between the Scottish Government and the Westminster Government—and if no one raised that essential issue, why not?” she demanded.

Mr Salmond said the Dunfermline approached the Scottish Government after it found talks with other bodies were not bringing a solution to its difficulties.

“I don’t agree that the contact, once we were involved with the UK Government, was ineffective,” he said.

Replying to a later question from Margo MacDonald, independent MSP for Lothians region, the first minister said it struck him as “strange” that a mutual could be broken up without a vote of its members, but that was provided for in the new Banking Act.

## - Welcome to the wonderful world of mutual "democracy", Alex :rolleyes:

And the SNP leader complains of Westminster government lack of communication to Dunfermline, too much communication with the press and misinformation to other building societies.

"He said the Nationwide was one of four potential bidders. Mr Salmond said, “I don’t understand why other financial institutions were contacted to see about the break-up of a society before the society itself was told.

“I don’t understand how the press were briefed that the society had ‘collapsed’ before the society’s board had met.

“And I don’t think that the seven building societies who had offered to put up capital to support the Dunfermline should be told by the FSA that there was no public funds available to support that recapitalisation when in fact that was not a full account of the facts, to put it at its mildest, because the Scottish Government’s offer of capital support was still on the table.”

Salmond hits out at the process

An unholy row is developing between Scottish Labour and the SNP. :rotfl:

".....SNP MSP for Central Fife Tricia Marwick asked: “Is the first minister aware of fury in Fife that the Dunfermline has been asset-stripped by the UK Labour government?”

Dunfermline East Labour MSP Helen Eadie said: “I welcome the swift action of Alistair Darling, the Treasury, Jim Murphy and Gordon Brown.”

baby_boomer

Herald - Salmond and Faulds kept out of the loop by Westminster

Faulds heard that the Dunfermline was no more from a Scottish journalist who had got it from a leak from No.11

Darling had been on the phone to Salmond on Saturday lunchtime but forgot to mention that the whole deal was going to be done within the next 36 hours!

Devolution at its finest :rotfl:

baby_boomer

Scotland and The Scotsman slowly catch up with the reality that has faced Derbyshire, Cheshire, Barnsley and Scarborough building society members

Anger as Dunfermline chiefs escape being held to account

"ANGRY members of the Dunfermline Building Society will be denied the chance to grill directors of the shattered institution after it emerged it has cancelled its annual general meeting..."

## - What did you think they were going to do? Set up the stocks& provide free rotten eggs?

However Scotland is getting special treatment. The Dunfermline accounts will eventually be published , unlike the accounts at all of the above BSs .

"A spokeswoman for the Dunfermline said: "Customers are now members of Nationwide so will they will be invited to attend Nationwide AGM [in Birmingham, enjoy the trip ]"

## - With all the questions from Derbyshire members, Cheshire members & now Dunfermline members, I doubt there'll be any room left for ordinary Nationwide members!

baby_boomer

Another prize row develops along the "Scots treated as 2nd class citizens" / "English imperialism" lines

My Finances - Dunfermline customers are locked out of Nationwide mortgage rate deals

## - Unlike Cheshire or Derbyshire customers - in spite of these societies continuing to operate their own brand under the Nationwide umbrella organisation.

"....Charlotte Sjoberg, nationwide spokesperson, said: "The BMR is only available for existing nationwide customers, and Dunfermline customers are not really existing customers....."

"....Ms Sjoberg added the deals to merge with Cheshire and Derbyshire were negotiated over a number of months but the deal to take over Dunfermline, which was essentially nationalised at the time, was "only viable" with the current rates in place...."

"....Stewart Hosie MP, Treasury spokesperson for the Scottish National Party, stated: ........."It is clear Nationwide have taken on the mortgages only to rip customers off."...."

## - This'll be the same SNP that wanted to keep Dunfermline independent - which would have required Dunfermline mortgage customers to pay ever higher rates ad infinitum :rotfl: