The Government has approved a package of measures that will afford building societies greater flexibility to introduce new products and could speed up the sale of Irish Nationwide, writes Siobhán Creaton, Finance Correspondent
The Minister for the Environment, Mr Cullen, said the measures would be implemented through legislation and were intended to ensure there was a level playing field between building societies and the banking sector.
"Building societies will be able to avail of a fuller range of options regarding their long-term development outside of the sector. At the same time existing legislation will be updated to ensure that it continues to provide statutory underpinning for societies that wish to remain within the sector," the Minister said yesterday.
The package contains measures that will satisfy the two remaining independent mutual building societies, the EBS and Irish Nationwide. The proposed legislation will allow building societies that demutualise to opt out of the rule preventing their takeover for five years after demutualisation. The Irish Nationwide has been lobbying for years for the removal ohf tis rule to make it easier for it to demutualise.
The legislation will also include provisions to allow for future development of building societies that wish to retain mutual status such as the EBS.
"This includes a broadening of the type of investments in which building societies can engage, options to broaden membership and removal of some restrictions which apply to building societies and are no longer necessary in a more diverse financial market," said the Minister.
