The Power of Customer-owned Banks
Chapter 5: The evolution of banks owned by other types of cooperative
Sometimes cooperative banks have been set up as an extension of the work of other types of cooperative. Networks of consumer, worker and producer co-ops have all, at various times and places, developed their own banks. Governments have also seen the benefits of providing credit to cooperative sectors as part of their wider economic policies. Sometimes they have set up state banks to do this, but more often than not they have set up a bank and then given it to a cooperative sector to run. Banks owned by cooperatives tend to be less independent than the cooperative banks and credit unions, and their democratic structures are indirect, but they are still member-owned rather than investor-owned. Like the other customer-owned banks, they have tended to become much more general in purpose, providing a wide range of financial products not just to cooperative businesses but to individuals as well. Seen from below, by customers looking at a bank branch on the high street, they are all quite similar. Seen from above, by someone interested in who owns and controls them, they are quite different. But then there is a further complication, some banks have been demutualising in order to raise more capital and be able to expand the business. In the case of banks owned by a cooperative, the change to investor-ownership creates a hybrid in which the cooperative still owns a substantial part of the business.
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