Book contents
- Frontmatter
- CONTENTS
- Acknowledgements
- List of Contributors
- List of Figures and Tables
- Introduction
- Part I Historical Context and Conceptual Framework
- Part II Comparative Country Cases
- 5 A Qualitative and Statistical Analysis of European Cooperative Banking Groups
- 6 The Persistence of the Three-Pillar Banking System in Germany
- 7 Alternative Banks in a Dualistic Economy: The Case of Italy before and during the Euro Crisis
- 8 Alternative Banks on the Margin: The Case of Building Societies in the United Kingdom
- 9 The United States: Alternative Banking from Mainstream to the Margins
- 10 BRIC Statecraft and Government Banks
- 11 Cooperative Banks in India: Alternative Banks Impervious to the Global Crisis?
- Conclusion
- Notes
- Index
8 - Alternative Banks on the Margin: The Case of Building Societies in the United Kingdom
from Part II - Comparative Country Cases
- Frontmatter
- CONTENTS
- Acknowledgements
- List of Contributors
- List of Figures and Tables
- Introduction
- Part I Historical Context and Conceptual Framework
- Part II Comparative Country Cases
- 5 A Qualitative and Statistical Analysis of European Cooperative Banking Groups
- 6 The Persistence of the Three-Pillar Banking System in Germany
- 7 Alternative Banks in a Dualistic Economy: The Case of Italy before and during the Euro Crisis
- 8 Alternative Banks on the Margin: The Case of Building Societies in the United Kingdom
- 9 The United States: Alternative Banking from Mainstream to the Margins
- 10 BRIC Statecraft and Government Banks
- 11 Cooperative Banks in India: Alternative Banks Impervious to the Global Crisis?
- Conclusion
- Notes
- Index
Summary
Origins and Development of an Alternative Banking Model
The Origins
Although the purpose of the present chapter is to show how British building societies might constitute a viable alternative to the failed business model that was exposed in British banking post-2007, it would be a mistake to consider that this was always the case. Originally, building societies were not banks. They were financial institutions of another, specialized kind. They were a mix between a savings bank and a cooperative mortgage lender. It is only belatedly (in the third quarter of the twentieth century) that they were allowed to expand beyond mortgage lending and become more bank-like.
The history of building societies is not unknown to the economic historian. As pointed out by Bellman, the history of building societies is longer than that of joint-stock banks – with the exception of the Bank of England. The first building societies saw the light in the 1770s in Birmingham, a city of rapid economic development and accumulation of wealth. The first building society was founded in 1775 by the owner of an inn, Richard Ketley, and was aptly named the Ketley Building Society. It was founded on a very simple principle, which has stood at the core of building society business models ever since: every member would pay a monthly subscription to the society; the funds so collected would then be used to pay advances (loans) to members wishing to acquire property; the property would be used as collateral to the loans.
- Type
- Chapter
- Information
- Alternative Banking and Financial Crisis , pp. 147 - 168Publisher: Pickering & ChattoFirst published in: 2014