Leader
| NORTH YORKSHIRE |  | | | CLEVELAND | | | | COUNTY DURHAM | |
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Our mutual friends
AS the dust settles, albeit
temporarily perhaps,
on the Government's
decision to
nationalise the Northern Rock
bank, we report this week on
the results of our local building
society.
It has been another year of
steady growth for "the Darlington"
with more money deposited
by savers and more
money lent to homeowners.
This has been achieved despite
the turmoil which hit the
financial markets in the second
half of 2007.
The reasons for this beacon
of fiscal soundness amidst a
sea of monetary madness of
course lie in sound management,
but also the Darlington
Building Society's mutual status.
Once upon a time - well it
seems like a long time ago -
Northern Rock was a building
society. Its mutual status governed
the way it could lend
money and there was direct
correlation between the
amount it lent and the deposits
it held on behalf of
savers.
The ruinous policy of raising
funds from the wholesale
money markets, which ended
with the Northern Rock
knocking on the Bank of England's
door last year after the
sub-prime crisis in the United
States tightened money markets
worldwide, could not
have happened if the Rock
had remained a mutual building
society.
This is not a paean to some
long-lost golden era of financial
probity before the de-mutualisation
stampede of the
1980s and 1990s. But it is a reminder
that a mutual building
society is not the unsophisticated
lending institution
some financial smart-alecs
have been suggesting. Not
many building societies are
left. In our region, the Darlington
and the Newcastle are the
only two remaining. In times
of trouble, the sound financial
principles enshrined in their
mutual status look more attractive
than ever.
1:31pm Friday 22nd February 2008
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