What term describes the process that enables savings institutions to transform into banks?

What term describes the process that enables savings institutions to transform into banks?
A . Demutualisation
B . Peer-to-peer
C . Refinancing
D . Swap

View Answer

Answer: A

Explanation:

Demutualisation refers to the process by which a mutual savings institution, such as a building society, converts into a publicly traded company or bank. This transformation allows the institution to raise capital through equity issuance and expand its services beyond mutual members.

Example:

The Abbey National Building Society in the UK demutualised in the 1980s to become a bank. [Reference: ICWIM, Topic: Financial Institutions and Their Structures., FCA Handbook: Demutualisation and Regulation of Financial Institutions., ]