(See a list of demutualised building societies here)
The development of the financial services industry from the
1970s onwards created the conditions for the huge changes
that have overtaken building societies. In
order to diversify to keep up with banks and other financial
institutions in the commercial world the old societies needed
to expand. To do this they had to raise capital.
Margaret
Thatcher’s Conservative government of the 1980s began
the process of loosening the bonds of mutality which led,
in the 1990s, to the rush to demutualise. But, in a sense,
demutualisation was only the logical outcome of changes that
had been occuring in the financial sector, and more widely
in society, for many years.
Nowdays
the only difference between most building societies and banks
is that building societies, still echoing their original function,
primarily offer mortgage services. Otherwise
current, savings and business accounts, credit cards and loans
are available from both. The
traditional community service of the old mutual society
no longer really applies. Even societies that have retained
their mutual status have expanded their products.
The
Skipton Building Society (founded 1853),
for instance, offers homeloan management and financial services
and controls 16 subsidiaries.
However
there is still strong support for the remaining mutual societies.
They are often able to offer better rates, for borrowing and
for lending, than other organisations.
They
offer a feeling of tradition and dependability –
important to savers in a fast changing financial market -
and cross-generational dependability: the investment of parents
and grandparents is passed on to children and grandchildren.
Often the old adage ‘if it ain’t broke, don’t
fix it’ applies to these traditional societies.
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