Dunfermline BS Stability

Andrew64

opinions4u wrote: »

No scheme + confidence in government actions

It seems to be like this in South-East Asia. I have an HSBC account in Malaysia because my consultancy fees are paid in Ringgit. The deposit scheme only covers a really low RM60,000, but nobody I've met is a bit worried about the banks here because the Central Bank has a really tight grip on what banks can do, and the bankers are really conservative! I asked the manager at my branch there about how secure my money was, and he pointed out that he had just turned someone down for a mortgage because even though he satisfied the basic requirements, he was maxed out on his credit card!

If the Dunfirmline BS was in Malaysia or Singapore, there would have been a run by now! In fact, why should it's customers keep their money in a BS that has been so badly managed?

RayWolfe

I wonder if people were saying similar just before the 1997 S E Asian banking crisis?

claire07

Roll on my soon to be maturing bonds and I'm out too.

Poor judgement at the top. What an easy earner for these bloaters.

Count_Dante

An interesting comment (#22) on the Mail on Sunday story:
http://www.thisismoney.co.uk/news/article.html?in_article_id=480850&in_page_id=2&ct=5&expand=true#StartComments

I supervised building societies at the FSA in the run up to the credit crunch. I am surprised more of these problems have not emerged sooner; much worse is to come. My experience convinces me that the entire movement is not a safe haven of stable, prudent on-balance sheet lending as popularly believed, but is instead facing incipient crisis. The problem is essentially one of poor asset quality attributable to ill-conceived "diversification" strategies which led these unsophisticated firms into areas such as large-scale commercial lending, residential sub-prime and self certified mortgages, and the purchase of mortgage loan books from wholesale lenders. Building societies did not understand the risks, and it is to the eternal discredit of the FSA that they were not stopped. In my time, the FSA's shockingly lax approach was justified by the complacent assumption that big fish would always bail out minnows "for the good of the movement". That assumption has been proven to be wrong.

Seems this is the tip of a nasty iceberg if the commenter is right...

baby_boomer

Times

Here we go.

Not the first lot of garbage we're going to hear from north of the border on the subject of Dunfermline, and no doubt not the last.

"The Financial Services Authority should repay the £7.2 million levy it has imposed on the Dunfermline Building Society as part of a savers’ compensation scheme, Willie Rennie, the Dunfermline and West Fife MP, has urged....."

Let's run through the logic of this.

An institution which has clearly put its savers' money at risk should NOT be liable for the levy to protect savers in general? :rotfl:

Has William cleared this crazy outburst with his party "boss", Vince Cable?

Meanwhile a Q&A from This is Money about what it means for BS savers

Evening Standard - Dunfermline bailout: What it means for mutuals

".......It seems as if the whole [BS] sector may be built on shaky foundations.

So who's next in the firing line then?

Nobody knows. Ratings agency Fitch said before Christmas that seven building societies are in for a rough ride in 2008; one of them has had to fall back on a merger to survive already. The interesting thing is that Dunfermline didn't even feature on the list :eek: , which means there may be further bad apples hidden in the barrel that have yet to be weeded out."

RayWolfe

Yes, it seems they have paid £20M and will be bailed out for £70M.

baby_boomer

Bloody good value!

Meanwhile, if you had £100K in the society, would you be more reassured by

a) a stiff drink?

b) the statement on the Dunfermline website by the Chief Executive?

"You may have seen the recent press articles in relation to the Society. The articles are speculative. Our results are due out in the next two weeks, and we will not comment on them until that time. Meanwhile, our focus remains as always on looking after our members. Thank you for your continued support. Jim Willens, Chief Executive."

c) The sight of a Dunfermline cheque for £50K clearing through your bank account?

Count_Dante

baby_boomer wrote: »

Bloody good value!

Meanwhile, if you had £100K in the society, would you be more reassured by

a) a stiff drink?

b) the statement on the Dunfermline website by the Chief Executive?

"You may have seen the recent press articles in relation to the Society. The articles are speculative. Our results are due out in the next two weeks, and we will not comment on them until that time. Meanwhile, our focus remains as always on looking after our members. Thank you for your continued support. Jim Willens, Chief Executive."

c) The sight of a Dunfermline cheque for £50K clearing through your bank account?

I vote B. All the 'speculative' reports are mistaken and they are going to post profits of £100 million. Really.

baby_boomer

More speculation about "business as usual".

Scotsman - Serious complications hit deal to rescue the Dunfermline

Who does what between Edinburgh, Westminster and the Building Societies?

"....Treasury ministers have been in secret talks with managers at Dunfermline for several weeks and, while The Scotsman understands that they are close to a deal, by last night they had not found a way of saving Scotland's biggest building society..."

Scotsman comment - Why there are deeper questions at Dunfermline

"Only yesterday, it seemed, small, local, mutually owned financial institutions were being tipped as the new banking model in post-crash Britain – just like the Dunfermline Building Society.

Think again...."

ahai1

Of course he has not his main job like a lot of MPs who have nothing else to do like been spokesman or in select committees is to keep the sit warm and vote.

He may have got carried away and started talking about areas he has no idea of.

The only differnece between banks, building socieites and credit unions is who owns them in my view. I have had good and bad services from building societies.

I am sure people will disagree but the thing is that they are all in the same boat take a look at the recent mergers.

baby_boomer wrote: »

Times

Here we go.

Not the first lot of garbage we're going to hear from north of the border on the subject of Dunfermline, and no doubt not the last.

"The Financial Services Authority should repay the £7.2 million levy it has imposed on the Dunfermline Building Society as part of a savers’ compensation scheme, Willie Rennie, the Dunfermline and West Fife MP, has urged....."

Let's run through the logic of this.

An institution which has clearly put its savers' money at risk should NOT be liable for the levy to protect savers in general? :rotfl:

Has William cleared this crazy outburst with his party "boss", Vince Cable?

Meanwhile a Q&A from This is Money about what it means for BS savers

Evening Standard - Dunfermline bailout: What it means for mutuals

".......It seems as if the whole [BS] sector may be built on shaky foundations.

So who's next in the firing line then?

Nobody knows. Ratings agency Fitch said before Christmas that seven building societies are in for a rough ride in 2008; one of them has had to fall back on a merger to survive already. The interesting thing is that Dunfermline didn't even feature on the list :eek: , which means there may be further bad apples hidden in the barrel that have yet to be weeded out."