Looks like West Brom Building Society is going UNDER

baby_boomer

opinions4u wrote: »

Why oh why did our legislators and regulators allow building societies to deviate from being savings and loan companies who earned a bit of extra income from arranging home insurance?.

The really funny thing is that the well supported All Party Parliamentary Committee for Mutuals approved a Bill (the Butterfill Private Members' Bill) to relax the restrictions even further :eek:

They were egged on by stupid society directors, particularly Britannia's, but with friends like this, who needs enemies?

MPs and money don't seem to mix :rotfl::rotfl::rotfl::rotfl:

Bernard_Coleslaw

opinions4u wrote: »

Why oh why did our legislators and regulators allow building societies to deviate from being savings and loan companies who earned a bit of extra income from arranging home insurance?

I agree, although I think there are still some out there that stuck to the basics and are managing to do OK as a result. I think there's a danger in thinking all building societies are the same. I'm perfectly happy with the ones I've got my money with.

cvd

The really funny thing is that the well supported All Party Parliamentary Committee for Mutuals approved a Bill (the Butterfill Private Members' Bill) to relax the restrictions even further

If you look on the web site for the Treasury, you will find the following statement

Section 1: The Government accepts the principle that building societies should have flexibility over their funding strategies. It is, however, not convinced of a need to implement this section in current economic circumstances. The Government will review the case for implementing Section 1 in two years time.

This statement is dated January 2009 and clearly illustrates that the Government is incapable of learning from events. It is quite happy for building societies to follow the Northern Rock model as soon as the present crisis is over.

Trollfever

The FSA is said to have particular concerns about societies which bought sub-prime mortgage-backed securities from institutions such as Lehman Brothers and GMAC.
Dunfermline building society, which was part-nationalised in March, had £900m of these assets, and huge exposures to commercial property and buy-to-let home loans.
West Brom also owns about £240m of sub-prime mortgage securities bought from GMAC, according to its most recent annual report.
An analysis drawn up by Royal Bank of Scotland into building societies identified West Brom as one of its biggest concerns.

Why did they buy sub-prime?



.

baby_boomer

Dunno.

But Scarborough bought a large GMAC portfolio which later brought it down.

In the next set of AGM literature they boasted to members how well they were doing given their rapid asset growth.

I guess that growth may have been linked to director bonuses? Alternatively it's a prestige thing at annual BSA meeeings. "My society grew faster than yours."

Bernard_Coleslaw

baby_boomer wrote: »

I guess that growth may have been linked to director bonuses? Alternatively it's a prestige thing at annual BSA meeeings. "My society grew faster than yours."

Maybe from now on the boast will be, "My arrears stats are lower than yours."

baby_boomer

Loads of denials in Monday's press but nothing in the Times as far as I can see.

Guardian - West Brom denies knowledge of FSA merger talks

"In common with other financial institutions, the West Brom has been working closely with the FSA in relation to its funding and capital position, including the current stress-testing exercise being conducted on a number of the larger building societies. The society has not received any indications from the FSA in relation to the results of this exercise, which commenced only recently. Furthermore, the West Brom has no knowledge of the FSA holding merger discussions relating to the society."

Herald - West Brom denies reports of a rescue offer

"The West Bromwich building society said it had a "long-term future" as an independent business and dismissed reports that it might become the subject of a rescue deal along the lines of the take-over of the Dunfermline building society....."

Herald - West Brom hits back at rumours

".......While the society confirmed it was in talks with the Financial Services Authority (FSA) regarding ongoing stress tests there was a strong denial of any particular problems with the company's balance sheet...."

Independent - "Long term independent future" for West Brom

".....[although] There was bad news for the group yesterday as West Bromwich Albion, the football team it sponsored for seven years, was relegated."

Telegraph - West Brom works to dampen rumours of FSA rescue plan

".....West Bromwich said it had exited the commercial lending sector more than 12 months ago, was no longer active in new buy-to-let lending, and had not acquired mortgage books from other lenders since 2006....."

So it must be OK then

frugalmacdugal

Hi,

baby_boomer wrote: »

So it must be OK then

so, further to my post (5), do you think it's save enough to put 50K into this morning, or should I wait a bit?

opinions4u

frugalmacdugal wrote: »

so, further to my post (5), do you think it's save enough to put 50K into this morning, or should I wait a bit?

1) I don't think the government will let you lose money if it goes tits up
2) But I wouldn't want the stress - governments can change policy
3) The FSCS is being used as a bottomless pit - but it's all based on borrowing against future banking profits - so it can go bust itself
4) Don't put in £50k. Put in £48k, just in case the FSCS don't honour the interest
5) I wouldn't. Shop around for a fraction of a % less elsewhere.

adminannie

Hi I have just sent them a cheque for £15000 should I have the cheque stopped or just let it go


Annie