Building Societies: Some Suggestions for Reform

The author conducted two surveys of building societies and consumers. The former linked supervisory techniques to the objectives of regulation and used the regime method, a methodology possibly relevant for other regulated industries. Some suggested reforms were devised including one supervisory agency for banks and building societies, the retention of mutuality (leading to mutual banks), a simplification of the capital adequacy rules, a lender of last resort, a minimum cash requirement, a rise in the wholesale limit to 50 per cent, more spot checks and an increase in the level of investor protection.