Cooperative Banks in Europe—Policy Issues

Author/Editor:

Wim Fonteyne

Publication Date:

July 1, 2007

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 07/159

Subject:

English

Publication Date:

July 1, 2007

ISBN/ISSN:

9781451867237/1018-5941

Stock No:

WPIEA2007159

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

68

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