Financial Reorganisation

Michael McWilliam

Chapter 5 in The Development Business, 2001, pp 54-62 from Palgrave Macmillan

Abstract: Abstract The litmus tests for CDC’s survival were threefold. First, it had to demonstrate business competence in a notably hazardous area of endeavour. As we have seen, operating profits were being earned by 1955 and a reputation for competence was on the way to being established. Second, it had to secure a mandate to develop its business, against the grain of Conservative political philosophy. The struggles over the area of permitted operations, of lending to government entities, over alternative finance and the creation of CDFC, were evidence of the real threats to CDC’s role as a development institution. The third test related to whether government would accept the need for CDC to wipe out the consequences of its earlier mistakes, through a reorganisation of its balance sheet, so that its continuing development role was not crippled by having to service and repay lost capital.

Keywords: Balance Sheet; Equity Capital; Special Loss; Building Society; Litmus Test (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1057/9780230504271_5

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