If you don’t think that the recapitalisation scheme by Gordon Brown doesn’t matter, then take a look no further than Nationwide Building Society. The mutual company is not under pressure in the equity markets like RBS, HBOS or Barclays. Yet, it too is going to take full advantage of the capital strengthening that the UK government has offered UK banks in order to increase confidence in the British banking system.
While I have not been impressed with Gordon Brown’s stewardship of Treasury while at No. 11 or as Prime Minister at No. 10, I must congratulate him on taking the right approach. The U.S. should look on eagerly and learn from Brown’s deft crisis management.
NATIONWIDE BUILDING SOCIETY AGREES TO STRENGTHEN CAPITAL
As announced on 8 October, Nationwide welcomes the UK Government’s package of financial support measures.
Nationwide is a well funded organisation with a robust and strongly capitalised balance sheet. It has a tier one capital ratio of 9.7% (as at 4 April 2008), which is in excess of the requirements under the UK Government’s banking sector scheme announced last week and one of the highest in the financial services sector.
We have no current need for additional capital. However, given our support for the Government’s initiative to stabilise market conditions, we have agreed to an increase in our capital base of £500 million. This is a prudent step which reflects unprecedented market conditions.
It is our intention to raise this additional capital through normal market channels between now and our financial year end.
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Press Release – Nationwide Building Society