Seven of Britain's smaller building societies face ongoing negotiations this week over funding measures introduced by the Government at the height of the credit crisis.
Downgrades by credit rating agency Moody's has prompted a fresh round of discussions with the Bank of England, though a spokesman for the Building Societies Association said they could not be characterised as "crisis talks".
Following the Moody's downgrades, the societies risk breaching the terms of the government's Special Liquidity Scheme, which could force them to hand back cash to the Bank of England. It was also suggested such a move would reduce the amount of new lending they could make, dealing a blow to Whitehall plans to kick-start the housing market.
Sunday Telegraph, The Times