Bring back the building societies!
Twenty years ago most South African building societies went commercial, and one result of this is that it became almost impossible for anyone except the very rich to save, because the commercial banks charged fees that emptied savings accounts faster than the poor could fill them.
In Britain, building societies that became banks have been causing huge problems, requiring government bailouts, while the buildings societies that remained building societies are now being penalised for the greed of the banks:
The chairman of the Building Societies Association (BSA), John Goodfellow has hit out at government plans to increase levies for the Financial Services Compensation Scheme (FSCS). The BSA estimates that Building Societies will be forced to pay an additional £200m into the scheme this year in order to bailout the savers of just Bradford & Bingley. A figure that is bound to rise once the cost of the collapsed Icelandic Banks is calculated.The BSA sees this as the mutual sector being forced to pay for the reckless behaviour of the banks. Not a single Building Society customer has lost money during the post war period. What’s worse is that HM Treasury has decided to base the levy not on institutional risk, but rather on the percentage of funds raised through retail depositors.
Meanwhile back home the ANC objects to the new party started by Mbhazima Shilowa and Terror Lekota taking the name Congress of the People — the Congress of the People was where the Freedom Charter was adopted in 1955. And building societies are more in the spirit of the Freedom Charter than commercial banks are. Yet the ANC and its alliance partners have done nothing about this for the last 15 years. It’s compatible with the guild socialism of people like G.K Chesterton.
If the new Congress of the People agrees to bring back the building societies and encourage them, they’ll get my support.
Hat-tip to Mutual Money.