The folly shown by some of them has brought the banking sector to its knees and will cost us, the taxpayer, billions of pounds to bail them out.

Not only that, but it raises the prospect of the nation having to borrow way beyond its means and we must keep our fingers crossed that we come out the other side.

What possessed these lenders to ignore every rule they had learned as building societies and throw caution – and wisdom – to the wind?

Building societies work on the principle that their savers provide the bulk of the cash for mortgage loans – usually more than 70 per cent.

So what was Northern Rock thinking when it decided it was a good idea to launch a mortgage product that allowed customers to borrow 125 per cent of the value of their homes?

That was at a time when it sourced only 25 per cent of its lending from its savers deposits – relying on the wholesale market for the remaining 75 per cent.

Equally why did the likes of B&B and Birmingham Midshires (part of Halifax) decide self-certification mortgages were a sensible way to lend money? Self-cert mortgages allow customers to lie about their income because – incredible as it sounds – the bank requires no proof of income. Borrowers simply state their income and the bank makes it plain they won't check the amount.

Not one of the seven former building societies has maintained its independence.

Abbey National converted into a Plc in 1989, but was taken over by Spanish bank Santander in 2004.

Cheltenham and Gloucester de-mutalised in 1994 and was taken over by Lloyds in 1995.

Alliance & Leicester converted to a Plc in 1997. A takeover by Santander was completed last week.

Halifax converted to a Plc in 1997 and merged with Bank of Scotland to become HBOS in 2001. HBOS is now being taken over by Lloyds and the new company will be part-nationalised following the deal.

Northern Rock converted to a Plc in 1997 and was nationalised in February following the first run on a British bank for more than 150 years. The Woolwich converted to a Plc in 1997 and was bought by Barclays in 2000.

And finally B&B converted to a Plc in 2000 and was the second bank to be nationalised this year.

Meanwhile the societies that chose what many described as the boring decision to stay mutual are laughing.

They have seen a massive influx of savings as people take their money out of banks and put them in the safe haven of a building society.

Having said that, not all building societies are equal. Last month Nationwide stepped in to rescue rivals Derbyshire and Cheshire after rising bad debts left the smaller societies nursing half-year losses of £17m and £10.5m, respectively.More rescues are expected. Building societies that have run too close to the wind in terms of a reliance on wholesale funding and self-cert mortgages are also expected to "merge" with bigger rivals.

Unlike the banks, the building societies protect their own and will close ranks if anyone suggests one of them is in trouble.

But the smart money is on Newcastle BS and West Bromwich BS being the next in line for a "merger". The good news is that if they do get taken over it won't cost the taxpayer a penny. Unlike the societies that decided to demutualise and throw caution to the wind.