Business Opinion: There is a lot of chat at the moment about the possible demutualisation of the Irish Nationwide Building Society. It centres on the long campaign waged by chief executive Michael Fingleton to change the building society legislation, pressure that appears finally to have borne fruit.

New legislation is expected sometime this year that will allow building societies to give up their mutual status and immediately be taken over. Under current legislation a building society that demutualises has to remain independent for five years thereafter.

This requirement has long been seen as the obstacle to the demutualisation of Irish Nationwide. Nobody has really explained quite how change will happen, but the assumption is that the removal of the five-year rule will in some way make demutualisation more attractive to Michael Fingleton and other senior Irish Nationwide executives.

One possibility is that they stand to make significant amounts of money, although to be fair, the reclusive Mr Fingleton has not really elaborated on his reasons for wanting the legislation changed.

The focus on Irish Nationwide has served to obscure another equally effective campaign being waged by the other large mutual building society, the EBS.

From documents released by the Department of the Environment under the Freedom of Information Act, it appears also to have won a battle to ensure that, whatever changes are made to the legislation, there will be nothing included that would make it possible for the EBS to be bounced into demutualisation against the wishes of the management, headed by Ted McGovern, and the board under Brian Joyce.

The EBS is a strong champion of the concept of mutualisation, under which the the institution is owned by its members (usually customers who have deposits and loans over a certain size).

They are nominally democratic organisations but, in reality, power is centred on the boards of the societies, which tend to be self-perpetuating.

In theory a mutual society is run for the benefit of its members as manifested by lower interest rates and higher deposit rates than those offered by profit-driven rivals.

The problem for the EBS is that this does not appear to be the case. Although it is competitive, the EBS does not offer the lowest mortgage rate in the market or the highest deposit rates.

The society would argue that taken in the round - across the full range of products and over a medium-term perspective - it is the most competitive. This may be the case, but it is hard to escape the conclusion that perhaps the EBS's management wants to hang onto its mutual status for non-ideological reasons.

One obvious explanation is that it protects them from the sort of shareholder pressure experienced by their peers in publicly quoted banks. However, it is hard to make this argument in the case of the EBS.

The society's cost/income ratio - the generally accepted measure of efficiency in the banking industry - is around 60 per cent.

But, when you strip out a number of items it falls to 50, which is on a par with AIB's operations in the Republic, according to Davy analyst Scott Rankin.

It is hard - based on the above - to make a strong case one way or the other for retention of mutual status by the EBS.

The only thing we can say with any certainty is that the reason it is not on the agenda is because the management of the building society doesn't want to put it on the agenda.

And that is the real point. The Government is contemplating introducing what will be a very complex piece of legislation to facilitate the wishes of the management of two financial institutions, rather than their owners.

The Review Group on Building Societies Legislation has representatives of the management of the EBS, the Irish Nationwide and the ICS building society (which is in effect a subsidiary of the Bank of Ireland). It also has representatives of the Department of the Environment, the Department of Finance and the Department of Enterprise Trade and Employment.

The Central Bank also has a seat at the table, but no sign of the owners or any evidence of public consultation, never mind internal consultation by the building societies themselves.

It is worth noting that it will have to be a pretty clever piece of legislation to facilitate both the Irish Nationwide's desire to be taken over and the EBS's desire to have its independence and mutual status underpinned. In fact, it is hard to see how any legislation can square this circle and have any sort of basis in a rational policy, never mind logic.

But that is only a side issue. What is really interesting here is that the only winners will be the managers.

Presumably Michael Fingleton will get his money or whatever else it is that he wants and Ted McGovern and his team will get to hang onto their precious mutuality. The suckers, sorry the members, will get the same uncompetitive banking that they have come to take for granted from all the financial institutions.