Co-operative Banking Networks in Europe. Models and Performance

Over the past 20 years, the increasing dominance of the shareholder ownership model in banking, with its main purpose of maximizing financial returns to shareholders, has proved to be a toxic combination with the financial deregulation, the creation of new financial instruments and the concomitant rising levels of bank leverage that have taken place. Despite the growing role of private joint-stock banks around the world, co-operative banking is still a credible and high-performing alternative way of doing banking. This is especially true in Europe where co-operative institutions have historical roots dating back to the nineteenth century. This book focuses on a sample of European co-operative banks (CBs), that nowadays perform universal banking activities, adopting a business model which is fundamentally based on mutuality, community development, not-for-profit and stakeholder orientation. This book presents a survey of the characteristics of different forms of integration of CB networks across several European countries and provides an assessment of their impact on several performance measures for the networks and their co-operative components. With a few exceptions, the existing empirical studies neglect to examine the features of the networks to which the banks belong. Surprisingly, there is little evidence on the extent to which diverse organizational forms of networks determine differences in individual banks’ and networks’ performances across different countries. The principal objective of this book is to fill this gap in the literature. The European countries investigated are Austria, Finland, France, Germany, Italy and the Netherlands. In all of these countries CBs have a significant presence, while the organizational forms of their networks vary widely. Therefore, focusing on this sample of European countries may allow us to draw out some insights and policy implications about the role that network organizations play in determining the performance of CBs.