Complexity and Crisis in the Financial System
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Complexity and Crisis in the Financial System

Critical Perspectives on the Evolution of American and British Banking

Edited by Matthew Hollow, Folarin Akinbami and Ranald Michie

With contributions from across the disciplines of law, history, finance, and economics, Complexity and Crisis in the Financial System offers a truly interdisciplinary study of the relationship(s) between crises and complexity in the US and UK financial markets. Taken together, the contributions in this volume not only challenge many often taken-for-granted ideas about the nature of financial crises, but also broaden our understanding of the long-term causes (and consequences) of the global financial crisis of 2007–2008.
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Chapter 6: Demutualization and risk: the rise and fall of the British building society

Andrew Campbell and Judith M. Dahlgreen


This chapter charts the development of the mutually owned building society in the UK as a means of providing a small and simple range of financial services to consumers in the nineteenth, twentieth and twenty-first centuries. The decline of the size of the sector in the late twentieth century is described, and this is identified as an unforeseen consequence of a small legal change in the Building Societies Act 1986 which permitted conversion of a mutual building society into a registered limited company with a share capital. The large number of consequent conversions and takeovers is noted. A legal change which was motivated by a desire to increase competition for consumers, in fact resulted in a reduction in competition and in the removal from the marketplace of financial services providers who had a simple and distinct product offering and ethos. Some restrictive features of building society legislation are identified and comments are made about the consequent financial stability of these necessarily conservative entities.

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