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Building Societies: Finance

Volume 481: debated on Thursday 23 October 2008

To ask the Chancellor of the Exchequer what support the Government has provided to building societies during the recent economic difficulties. (228596)

The recapitalisation scheme announced on 8 October provides three measures aimed to help not just UK banks (including foreign subsidiaries) but also UK building societies. The extension of the Special Liquidity Scheme will provide short-term liquidity. The recapitalisation through shares (both ordinary and preference) as well as Permanent Interest Bearing Shares (PIBS), will strengthen institutions’ resources, allowing them to restructure their finances while maintaining their support for the real economy. The credit guarantee scheme will ensure that the banking system has the necessary funds in the medium term. This scheme, which is now being replicated worldwide, is available for all UK building societies.