Are we witnessing the end of the UK building society sector?
With rumours rife about the West Bromwich building society and other smaller operators in the UK building society sector there are serious concerns that this could be the beginning of the end. This is a sector which goes back hundreds of years and until now has operated on one of the more sound financial footings in the UK economy. However, many observers hark back to the recent changes in building society regulations and rules which allowed a greater degree of debt and also introduced new funding initiatives.
A picture is starting to emerge which would indicate that maybe the smaller operators, whether currently on a financially sound footing or not, will possibly receive merger approaches in the future. Those in the top league of the UK building society sector are becoming more and more concerned about the damage to confidence in the sector as a whole. Whether we are starting to see the smaller building society sector start to unravel remains to be seen but there are by all accounts issues which need resolved and action which needs to be taken.
Many will be disappointed by any potential change in the make-up and number of building societies in the UK as they have for many years been popular with a vast array of the UK population. Hopefully the ongoing confidence issue will turn out to be short-term and the sector will revert to normal but only time will tell.
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