The zeal in the enforcement of new tougher regulations has become the bane for mutual fund banks. This means that UK bank regulators are, instead of helping one of the cornerstones of the nation's financial network, help in its untimely demise.

Many of the new regulatory measures aim to shore up the banks all across Britain to avoid another financial crisis. Unfortunately, the sheer number and their degree of difficulty in compliance leave many mutual funds afraid of what would be the next move in the economy.

One of the largest mutual funds in the country, Nationwide, is under tremendous pressure to formulate a plan by the end of this week on how the fund would be able to raise another GBP2 billion for its reserve capital base. The fund has been in business since 1846 and is considered amongst the most ethically sound forms of banking in the country.

According to an IFR report, which quoted an anonymous banking source, said, "This really cold be the death of the UK mutual, Natiionwide has always been a defender of its model and is considered to be not only the largest but the strongest of its kind."