Dunfermline Building Society rescued by government
The UK government was today forced to bail out the Dunfermline Building Society with a £70 million hit for the UK taxpayer. There have been rumours for some days that the building society had hit trouble with losses of over £26 million from alleged risky lending in the commercial sector and sub-prime loan market. The society itself has 250,000 savers and 35,000 borrowers although the UK government has guaranteed all cash deposits.
The Treasury has been working around the clock to persuade others in the building society sector to stump up the £70 million required to keep the business going, but to no avail. As we suggested a few days ago when we covered the subject, the situation seems to be very unique to the Dunfermline Building Society and while there will be concern in the sector it is unlikely to have a significant short, medium or long term effect. This is however the first building society to go under as a consequence of the ongoing recession and sees yet more money stumped up by the UK taxpayer.
The government is allegedly trying to find a longer term partner, even though £70 billion has been invested in the business, and we will report on developments in the future.
Share this..
Related stories
Fury over Google's UK tax situation
It has been revealed that Internet giant Google would appear not to have paid any tax on UK advertising revenues of £1.6 billion in 2008. In a perfectly legal arrangement, Google has diverted all of its UK advertising earnings to an Irish subsidiary which saved the company an estimated £450 million in corporation tax for 2008. However, the revelation by the Times newspaper has certainly attracte...
Read MorePlastic bag use down 71% since levy introduced
09/09/2015 The number of plastic bags handed out in shops and supermarkets fell by 71% in Wales since a 5p charge was introduced in 2011, a change which England will be hoping to replicate when it introduces the charge next month. The review also estimated that between £17 million and £22 million had been raised through the charge, which has been donated to good causes. 74% of people in W...
Read MoreCash machine fees withdrawn for UK's poorest
After research into machine withdrawal habits, it was found that over 300 areas of the UK had no access to fee-free cash withdrawals, reported Link, the firm responsible for running cash machines.Under new law, which allows banks to offer cash machine companies financial incentives in return for installing fee-free cash machines, poorer communities are set to benefit.Plans for 362 non-charging cas...
Read MoreMPC member warns of tightening monetary policy too quickly
David Miles, one of the more vocal members of the MPC, has today warned UK government and the Bank of England in particular that a premature tightening of monetary policy could well send the UK economy into a tailspin. Despite very mixed signals from the UK economy there is intense speculation that the UK government and the Bank of England will introduce a number of fiscal stimulus programs in the...
Read MorePublic sector borrowing hits record high
The UK government borrowed £20.3 billion in November to fund public sector services in the UK, the highest figure since records began in 1993. While the £20.3 billion question was less than some analysts had expected, it does perfectly illustrate the worsening financial situation in the UK and the fact that it will not be "fixed" overnight. The office for National statistics also confirmed th...
Read More