Another lender on the brink
- 00:02:29
- ITN
Another lender on the brink
The Government is set to bail out Scotland's biggest building society after it racked up millions in losses. Scottish Secretary Jim Murphy announced that the Treasury was stepping in to protect depositors in the Dunfermline Building Society, ahead of the expected announcement next week of losses of £26 million. He confirmed that the Government is considering separating out the society's so-called "toxic" assets while selling on the profitable parts of the organisation to other financial institutions. Although Mr Murphy did not identify any potential purchasers, the Britannia, Nationwide and Yorkshire building societies have all been linked to a possible sale. He blamed "reckless" decisions taken by the society's former management - including its involvement in the US sub-prime mortgage market - for its current plight. Mr Murphy said: "We are acting to make sure there is stability, to protect savers, and to do as much as we can to save jobs and branches because Dunfermline is important." The announcement follows the failure of talks last week between Scotland's First Minister Alex Salmond and Chancellor Alistair Darling to find a way of preserving the Dunfermline. Mr Murphy added: "We have looked at a number of proposals along with the Building Societies Association and the Scottish Government but concluded those would ultimately have done little more than buy time. "If there was a standard bailout that we have seen in some of other situations, there is a real worry that the Dunfermline couldn't actually service the debt, so we are looking at some of the other kinds of models like the Bradford and Bingley type model."
ITN | March 29, 2009
