Building Societies Association urged remutualisation of Northern Rock

In its Budget submission to the Chancellor of the Exchequer the BSA said

The BSA welcomes the commitment by the Coalition Government to foster diversity, promote mutuals and create a more competitive banking industry. A financial system with diverse ownership and governance structures is better able to weather the strains of the business cycle than one which is plc-dominated. Mutuals can counter-balance the short-termist pressure of the City. Mutuals also help reduce the concentration of financial sector resources and employment in the City, dispersing wealth and welfare to regional and local economies.

Keeping a reformed Northern Rock independent of the big banks would be good for competition.  A remutualised Northern Rock would help the Government to meet its policy objective of supporting competition and diversity through the maintenance of a strong mutually-owned financial sector. In any exit process the Government needs to achieve optimum value for the taxpayer.  A re-launched and remutualised Northern Rock can repay the taxpayer stake over time. A deferred payment profile can give the optimum outcome, both returning the full value to the taxpayer and achieving other public policy goals, such as increased stability and competition.