Report on the Costs and Benefi

REPORT ON THE COSTS & BENEFITS OF A BUILDING confederacy CONVERTING TO A PLC Introduction At the beginning of this century there were to a greater extent than 2000 building societies, fiercely independent mutual organisations, formed in the spirit of Victorian self help. There are straightway just 71. Some of these that withstand disappeared were terminating societies with a fixed soupcon up date. The last “terminating” society was the Fist Salisbury which displease up in 1980. Other societies have been swallowed up in take-overs or converted into banks in the great 1997 demutualisation. This assignment leave discuss this trend with particular reference to the potential cost and benefits in the short and long term. This assignment will watch the costs and benefits to the building societies as well as those to the members and staff. The be and Benefits to the create Society Conversion to plc status is seen as having the major utility that there would be freedom from the limitations imposed by the Building Societies turn of events 1986, 1997 the statutory framework for the Building Society industry.

The restrictions the Act impose include the following: 1) 75% of all impart has to be secured against residential property This means that Building Societies are moderate in their participation in the more than risky, but more rewarding unguaranteed lending. At the moment, Societies can remove unsecured personal loans up to a limit of £15,000 per customer, whereas there is no ceiling for Banks. Building Societies with less than £100m of assets are not permitted to make unsecured loans. 2) No more than 50% of funds may be raised on the wholesale markets This limit was previously 40% before the revised 1997 Building Societies Act. Building societies have eagerly taken the opportunity to raise money in the wholesale markets, which have frequently proved to be the cheapest opening of wholesale funds (Wholesale funds are large deposits set by... If you want to get a full essay, order it on our website: Orderessay

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