Brown reassures savers as Dunfermline collapses
Dunfermline Building Society, established in 1869, has collapsed after last-minute rescue attempts failed.
The British financial institution, which has a workforce of around 500 across more than 30 branches, is to be auctioned off to the highest bidder with The Sunday Times reporting that Santander, National Australia Bank and Bank of Ireland are potential bidders.
The Building Society, which is Scotland’s largest, has been taken under Government control and according to the BBC, Prime Minister Gordon Brown has reassured savers that their money is safe.
It is hoped that the Government will be announcing a buyer for Dunfermline as early as Monday.
The UK’s building societies have been relatively unscathed by the banking crisis but recently, several small societies have been rescued by their larger rivals.
Cheshire and Derbyshire building societies have been swallowed up by Nationwide, while Britannia Building Society is in the process of merging with Co-operative Financial Services, as are Scarborough and Skipton.
However, building societies have benefited since the collapse of Icelandic banks, Icesave and Kaupthing Edge, and the near collapse of Northern Rock and Bradford & Bingley.
According to a recent report from the Building Societies Association (BSA), over one million people opened a new building society savings account last year.
The BSA said an additional 1.2 million accounts (net of closures) were opened during the 2008 year. As a result, an extra £9.9 billion was held by building societies in December 2008 than in January the same year.
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