Co-operative banking alive and thriving in Europe

cepheus

Whilst the British hysterical response to the Banking crisis included hiding cash beneath the mattress and buying gold, the continentals appear to have found a genuine safe alternative from the big banks.

"The banking crisis confirmed that financial co-operatives are stable and risk averse. Most came through without needing government bailouts, without ceasing to lend to individuals and businesses, and with the admiration of a growing number of people disillusioned with 'casino capitalism'.........

Across Europe, co-operative banks have perhaps 20% of total retail banking business, with the co-operative sector being even more significant in a number of countries. In France, the three major co-operative bank federations – Credit Agricole, Credit Mutuel and BPCE – have an estimated 45% market share. In the Netherlands the highly successful Rabobank has 10 million customers and a 40% market share."

http://socialenterprise.guardian.co.uk/social-enterprise-network/2013/jun/13/coop-bank-thrive-in-europe

agrinnall

Doesn't seem a million miles from UK Building Societies.

Thrugelmir

And what did these safe banks do..........

French bank Credit Agricole has reported a record loss for 2012 after an unexpected tax charge relating to the sale of its Greek business pushed it deeper into the red.

Losses for last year totalled 6.5bn euros ($8.7bn; £5.6bn).

The worsening economic downturn also led to losses at the bank's Italian and investment banking divisions.

http://www.bbc.co.uk/news/business-21516253

Thrugelmir

agrinnall wrote: »

Doesn't seem a million miles from UK Building Societies.

A far number of UK building societies have had to be taken over due to poor lending decisions.

Thrugelmir

Internet banking leads Rabobank to close branches, cut 3,000 jobs

http://www.dutchnews.nl/news/archives/2013/02/internet_banking_leads_raboban.php

Thrugelmir

The state of UK journalism these days is shocking. Poorly researched and often lacking any real understanding of the topic.

cepheus

The co-operatives are not perfect and the article makes that clear. However as a proportion of the total size, what proportion of big banks had to be bailed out verses smaller cooperative institutions? In bad times aren't the small guys supposed to go under first?

I think the problem was that many of the more customer orientated institutions felt they had to complete with the banks using more risky investments, but the execs of the big banks were in for short term gains without regard for their customers.

antrobus

cepheus wrote: »

The co-operatives are not perfect and the article makes that clear. However as a proportion of the total size, what proportion of big banks had to be bailed out verses smaller cooperative institutions? In bad times aren't the small guys supposed to go under first?...

Maybe that's because the institutions referred to in your OP - Credit Agricole, Credit Mutuel, BPCE, and Rabobank - are not "small guys".

cepheus wrote: »

....I think the problem was that many of the more customer orientated institutions felt they had to complete with the banks using more risky investments, but the execs of the big banks were in for short term gains without regard for their customers.

Now you're just making excuses.:)

cepheus

The difference seems to be that the big banks finances were so intertwined they couldn't be bailed out through themselves, it required government intervention. Building Societies and cooperatives as a whole seem to be able to look after themselves without taxpayers money. Public shareholder banking seems to me to be one long list of pathetic excuses to defend the status quo.

Thrugelmir

cepheus wrote: »

In bad times aren't the small guys supposed to go under first?

A fair number of Building Societies have been merged or taken over. They were not immune to the credit crash.

In the case of Skipton and Norwich & Peterborough they were forced to invoke contract clauses in their mortgage contracts to raise interest rates. Without doing so they would become insolvent.

Mutuality means nothing. Equitable Life is the classic example. Any business ultimately depends on good management. Irrespective of it's legal status.

cepheus

Thrugelmir wrote: »

A fair number of Building Societies have been merged or taken over. They were not immune to the credit crash.

No not individually but as a whole they probably were. No-one expects all companies within a sector to be well run, or all to be badly run like the banks were.