Cooperative banking From Wikipedia, the free encyclopedia Jump to: navigation, search A statue of cooperative pioneer Robert

Owen stands in front of the Manchester he ad office of the UK's Co-operative Bank Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most par ts of the world. Cooperative banking includes retail banking carried out by cred it unions, mutual savings banks, building societies and cooperatives, as well as commercial banking services provided by mutual organizations (such as cooperati ve federations) to cooperative businesses.[citation needed] Contents 1 Institutions 1.1 Credit unions 1.2 Cooperative banks 1.3 Building societies 1.4 Others 1.5 International associations 2 By region 2.1 Quebec 2.2 United Kingdom 2.3 Continental Europe 2.4 India 2.5 Bangladesh 3 Microcredit and microfinance 4 List of cooperative banking institutions 5 See also 6 References Institutions Credit unions Main article: Credit union Credit unions have the purpose of promoting thrift, providing credit at reasonab le rates, and providing other financial services to its members.[1] Its members are usually required to share a common bond, such as locality, employer, religio n or profession, and credit unions are usually funded entirely by member deposit s, and avoid outside borrowing. They are typically (though not exclusively) the smaller form of cooperative banking institution. In some countries, they are res tricted to providing only unsecured personal loans, whereas in others, they can provide business loans to farmers, and mortgages. Cooperative banks Larger institutions are often called cooperative banks. Some are tightly integra ted federations of credit unions, though those member credit unions may not subs cribe to all nine of the strict principles of the World Council of Credit Unions (WOCCU). Like credit unions, cooperative banks are owned by their customers and follow th e cooperative principle of one person, one vote. Unlike credit unions, however, cooperative banks are often regulated under both banking and cooperative legisla tion. They provide services such as savings and loans to non-members as well as to members, and some participate in the wholesale markets for bonds, money and e ven equities.[2] Many cooperative banks are traded on public stock markets, with the result that they are partly owned by non-members. Member control is diluted by these outside stakes, so they may be regarded as semi-cooperative. Cooperative banking systems are also usually more integrated than credit union s

ystems. Local branches of cooperative banks elect their own boards of directors and manage their own operations, but most strategic decisions require approval f rom a central office. Credit unions usually retain strategic decision-making at a local level, though they share back-office functions, such as access to the gl obal payments system, by federating. Some cooperative banks are criticized for diluting their cooperative principles. Principles 2-4 of the "Statement on the Co-operative Identity" can be interpret ed to require that members must control both the governance systems and capital of their cooperatives. A cooperative bank that raises capital on public stock ma rkets creates a second class of shareholders who compete with the members for co ntrol. In some circumstances, the members may lose control. This effectively mea ns that the bank ceases to be a cooperative. Accepting deposits from non-members may also lead to a dilution of member control. Building societies Main article: Building society Building societies exist in Britain, Ireland and several Commonwealth countries. They are similar to credit unions in organisation, though few enforce a common bond. However, rather than promoting thrift and offering unsecured and business loans, their purpose is to provide home mortgages for members. Borrowers and dep ositors are society members, setting policy and appointing directors on a one-me mber, one-vote basis. Building societies often provide other retail banking serv ices, such as current accounts, credit cards and personal loans. In the United K ingdom, regulations permit up to half of their lending to be funded by debt to n on-members, allowing societies to access wholesale bond and money markets to fun d mortgages. The world's largest building society is Britain's Nationwide Buildi ng Society. Others Mutual savings banks and mutual savings and loan associations were very common i n the 19th and 20th centuries, but declined in number and market share in the la te 20th century, becoming globally less significant than cooperative banks, buil ding societies and credit unions. Trustee savings banks are similar to other savings banks, but they are not coope ratives, as they are controlled by trustees, rather than their depositors. International associations The most important international associations of cooperative banks, both based i n Brussels, are the International Association of Cooperative Banks (CIBP), which has member institutions from around the world, and the European Association of Co-operative Banks. By region Quebec The caisse populaire movement started by Alphonse Desjardins in Quebec, Canada, pioneered credit unions. Desjardins opened the first credit union in North Ameri ca in 1900, from his home in Lvis, Quebec, marking the beginning of the Mouvement Desjardins. He was interested in bringing desperately needed financial protecti on to working people. United Kingdom British building societies developed into general-purpose savings and banking in stitutions with one member, one vote ownership and can be seen as a form of financ ial cooperative (although some de-mutualised into conventionally-owned banks in the 1980s and 1990s). The UK Co-operative Group includes both an insurance provi der, the CIS, and The Co-operative Bank, both noted for promoting ethical invest ment. Continental Europe

Important continental cooperative banking systems include the Crdit Agricole, Crdi t Mutuel, Banque Populaire and Caisse d'Epargne in France, Rabobank in the Nethe rlands, BVR/DZ Bank in Germany, Banco Popolare, UBI Banca and Banca Popolare di Milano in Italy, Migros and Coop Bank in Switzerland, and the Raiffeisen system in several countries in central and eastern Europe. The cooperative banks that a re members of the European Association of Co-operative Banks have 130 million cu stomers, 4 trillion euros in assets, and 17% of Europe's deposits. The Internati onal Confederation of Cooperative Banks (CIBP) is the oldest association of coop erative banks at international level. In Scandinavia, there is a clear distinction between mutual savings banks (Sparb ank) and true credit unions (Handelsbank). India The origins of the cooperative banking movement in India can be traced to the cl ose of nineteenth century when, inspired by the success of the experiments relat ed to the cooperative movement in Britain and the cooperative credit movement in Germany, such societies were set up in India. Cooperative banks are an importan t constituent of the Indian financial system. They are the primary financiers of agricultural activities, some small-scale industries and self-employed workers. The Anyonya Co-operative Bank in India is considered to have been the first coo perative bank in Asia. Bangladesh Progoti Co-operative Landmortgage Bank Limited (Progoti Bank) is a co-operative land mortgage bank which started functioning since 10 January 2009 in Kapasia, a small town nearly 60 kilometer north of Dhaka City. This is the first specializ ed land mortgage bank in Bangladesh.[citation needed] Microcredit and microfinance The more recent phenomena of microcredit and microfinance are often based on a c ooperative model They focus on small business lending. In 2006, Muhammad Yunus, founder of the Grameen Bank in Bangladesh, won the Nobel Peace Prize for his ide as regarding development and his pursuit of the microcredit concept. List of cooperative banking institutions Cooperative banking institutions Name Country Members (2010)[3] Assets (2010 US$ millions)[3] Type Alternative name Notes Crdit Agricole France [4] Joint stock bank CASA Majority owned by federation of credit unions DZ Bank Germany Bank Deutsche Zentralgenossen schaftbank German Central Cooperative Bank Owned by three quarters of all Volksbank and Raiffeisenbank (cooperative banks) in Germany and Austria Caisse d'Epargne France literally savings bank Credit union federation Rabobank Netherlands 1,500,000+ Credit u nion federation Nationwide Building Society UK Building society World's largest building society Groupe Banque Populaire France 3,400,000 Desjardins Group Canada 5,795,277[5] Credit union federation Leading bank in Quebec Raiffeisen Zentralbank Austria Bank RZB sterreich Credit union federation Nonghyup South Korea Banking division of agricultural cooperative National Agricultural Cooperative Federation (NACF) Approx U S$230 billion in loans Raiffeisen Landesbank Sdtirol Italy Bank Cassa Centrale R

aiffeisen dell'Alto Adige OP-Pohjola Group and Pohjola Bank Finland 31% share of Finnish credit market, and 32% share of savings and deposit market[ 6] Bank Persatuan Malaysia 46,135 86,375,542.97 Bank Koperasi Bank Pe rsatuan Malaysia Berhad 2nd national cooperative bank in Malaysia Co-operative Bank UK Not applicable[7] [8] Bank Subsidiary of consumer cooperative Navy Federal Credit Union US 3,004,352 33012 Credit union Shared Interest UK [9] Cooperative lending society Finance for fair trade See also Portal icon Cooperatives portal Building society Credit union Savings and loan association Mutual savings bank References ^ E.g., 12 U.S.C. 1752(1), available at http://www.ncua.gov/RegulationsOpini onsLaws/fcu_act/fcu_act.pdf; CUNA Model Credit Union Act 0.20 (2007); see also 1 2 U.S.C. 1757, available at http://www.ncua.gov/RegulationsOpinionsLaws/fcu_act/ fcu_act.pdf; CUNA Model Credit Union Act 3.10 (2007). ^ The Co-operative Bank of the UK strictly limits its borrowing from the mar kets, according to an October 2008 statement [1]: ... we do not borrow in the fin ancial markets in order to lend. Our lending capital is generated from customers ' investments and savings, leaving us a good deal less exposed to the vagaries o f the market than many of the major lenders. ^ a b Figures at close of institution's 2007 financial year, from organizati on's annual report. If no US$ equivalent given in annual report, exchange rate o f Dec 31, 2007 used. ^ EUR 31 billion ^ Desjardins Group figures - Information as at December 31, 2008. Available at http://www.desjardins.com/en/a_propos/qui-nous-sommes/chiffres.jsp ^ "Key figures". Unico Banking Institute. 2006. ^ Co-operative Bank customers are eligible to join its parent Co-operative G roup ^ 13.1 billion GBP ^ GBP 25.1 million