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Is the building society sector slipping away?

Over the last few months the UK banking sector has grabbed the headlines although unfortunately we've also seen a number of casualties in the building society sector. Not only did we see former building society Northern Rock collapse and taken over by the government, we also saw problems at the Dunfermline building society and problems with the West Bromwich building society.

One of the main issues which have grabbed the headlines regarding mutual societies is the fact that the West Bromwich building society was the first to bring in third party investors and introduce outside finance to the operation. These new investors literally saved the day as the society was on the verge of collapse due to a number of mortgage arrangements which had "gone wrong". Many people believe this particular change in approach by the West Bromwich building society is a major crossroads for the sector and could see a change forever.

The mutual society has been the cornerstone of the UK financial sector for many years and one which has attracted a massive number of customers, all under the impression that the sector was safer and more secure than the larger banking arena. However, unfortunately as the ongoing recession has shown, the sector is maybe not as secure as it once was with a number of changes to the way in which finance is raised probably at the core of the problem. The chances are that the mutual sector, and in particular the building society sector, may never be the same again.

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