Scots MPs to probe demise of Dunfermline Building Society

Published on Friday 8 May 2009 22:11

AN INFLUENTIAL committee of Scottish MPs is to hold an inquiry into why the Dunfermline Building Society had to be rescued earlier this year, it was announced yesterday.

The Scottish Affairs Committee will mount an investigation into the circumstances that led to the Nationwide buying parts of the society.

It will also look at the effect this has had on banking services.

The committee will take evidence from the Treasury, the Financial Services Authority and the Bank of England.

MPs will also hear from officials from the Dunfermline and Nationwide building societies. Dunfermline ran into trouble in March this year when it emerged that the society was having to write off millions of pounds due to the collapsing commercial property market.

It then announced losses of 26 million.

As a result of negotiations with the Treasury, core parts of the Dunfermline were transferred to the Nationwide Building Society.

The Treasury said it would take on about 1.5 billion of commercial property lending and acquired mortgage debt under the deal, freeing up the profit-making parts of the society to be sold to Nationwide