Turned failed banks into mutuals

[Expounder]

Labour M.P.s are pushing for the government to expand the role of the mutuals.

the Co-op's General secretary Michael Stephenson said " the government could consolidate Nothern Rock and it's holdings into one institution when all debts are paid back"[unquote]

Would this would be the best option also for Bradford and Bingley be remutualised once tax payer's money is returned?

Read link:

Turn failed banks back into mutuals, Labour told | Business | The Observer

[Midas]

Labour M.P.s are pushing for the government to expand the role of the mutuals.

the Co-op's General secretary Michael Stephenson said " the government could consolidate Nothern Rock and it's holdings into one institution when all debts are paid back"[unquote]

Would this would be the best option also for Bradford and Bingley be remutualised once tax payer's money is returned?

Read link:

Turn failed banks back into mutuals, Labour told | Business | The Observer

It might come as a surprise to some, but I don't have a fundamental problem with remutualising the building societies. They were originally established to provide loans for home owners, period, and I can't really see an issue with going back to those basic principles. Although they're both in the money business, the core markets for banks and building societies are very different.

Provided that there were much stricter guidelines on the ratio of loan to valuation and on the ability to repay as a multiple of income, this would certainly provide one way of at least curbing the cycle of inflation and deflation in house prices. It could potentially open up ways to expand co-ownership schemes for those struggling to get onto the property ladder, something I think will be an issue for a long time yet.

[Expounder]

It might come as a surprise to some, but I don't have a fundamental problem with remutualising the building societies. They were originally established to provide loans for home owners, period, and I can't really see an issue with going back to those basic principles. Although they're both in the money business, the core markets for banks and building societies are very different.

Provided that there were much stricter guidelines on the ratio of loan to valuation and on the ability to repay as a multiple of income, this would certainly provide one way of at least curbing the cycle of inflation and deflation in house prices. It could potentially open up ways to expand co-ownership schemes for those struggling to get onto the property ladder, something I think will be an issue for a long time yet.

I think you are spot on midas, there are not enough mutuals. I thought they might have all disappeared with the speed they opted for banking status in the 80s and 90s.

I hope there is a revival on the cards when the dust settles. I agree with what you say and it would help stabalise and secure mortgage borrowing.

If this happens it would be one positive thing to come out of this crisis.