Cover IMF Working Papers
Cooperative Banks in Europe—Policy Issues
Author:
Mr. Wim Fonteyne
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Series:
IMF Working Papers
Volume/Issue:
Volume 2007: Issue 159
Language:
English
Publication Date:
01 Jul 2007
DOI:
https://doi.org/10.5089/9781451867237.001
ISBN:
9781451867237
ISSN:
1018-5941
Pages:
68
Keywords:
WP; cooperative society; business model; banking sector; economic value
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper explains the continuing success of European cooperative banks through evolving comparative advantages. It points out that a cooperative is built around an intergenerational endowment without final owners, which creates particular governance challenges. Risks include the use of the endowment for purposes other than members' best interest, such as empire-building, and attempts at appropriation. The risk of empire-building is reinforced by mechanisms that foster capital accumulation and asymmetric opportunities for consolidation. The paper concludes that some form of independent external oversight of corporate governance is warranted and that cooperatives need mechanisms enabling them to better manage their capital.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2007: Issue 159