THE RESCUE of the Dunfermline Building Society could have seen a better outcome if the process had been “more orderly”, First Minister Alex Salmond said.
He told MSPs yesterday that the Scottish Government was ready to put in £25million to help save the mutual. But he hit out at the “difficulty” in getting information from the Financial Services Authority (FSA) about amounts needed to secure the society, and the process which led to its downfall.
The Treasury paid £1.6billion to Nationwide as part of a rescue deal.
The Dunfermline found it “impossible” to obtain dialogue about its future through the arrangement involving the Bank of England, FSA and the Treasury, Mr Salmond said. “Throughout this process the Dunfermline Building Society seemed to be the last people to hear of their fate,” he told MSPs.
“If the process had been more orderly, I believe it could have produced a better outcome for the members of the society, for the headquarters staff of the Dunfermline and for Scotland.”
As well as the Scottish Government’s £25million injection, a consortium of seven building societies was ready to inject up to £30million, Mr Salmond said at Holyrood yesterday. His officials were in “constant contact” with the FSA and Treasury, but he said: “It was extremely difficult to obtain information on capital required.”
Mr Salmond admitted the responsibility for the society’s plight lay with “the management of that institution, present and particularly recent past”. The society was set to announce losses of £26million for 2008.
Scottish Labour leader Iain Gray said: “The first minister persists with his insistence that there could have been a better outcome but it remains unclear exactly what that would have been.”
The Bank of England and others judged that even with a £60million capital injection the society would not have had a long-term future without aid of a larger society and removal of its toxic debt.
Mr Salmond said the preferred outcome would been for investment to enable the Dunfermline to continue. He added: “If even a tenth of the protection of assets effectively available to the Nationwide had been available to the Dunfermline, that’s exactly what could have happened”.
Scottish Tory leader Annabel Goldie said an impression had been created of “chaotic” communications between the Scottish and Westminster governments and between Westminster and the Dunfermline itself.
SNP MSP for Central Fife Tricia Marwick asked: “Is the first minister aware of fury in Fife that the Dunfermline has been asset-stripped by the UK Labour government?”
Dunfermline East Labour MSP Helen Eadie said: “I welcome the swift action of Alistair Darling, the Treasury, Jim Murphy and Gordon Brown.”