Part III Ownership Structures, 15 Cooperative Banking—A Dutch Experience

Subject(s):

Regulation of banks — Investment business

This chapter focuses on cooperative banks. Although smaller in number, cooperative banks are significant players in the financial market. All cooperative banks have in common the fact that they are key players in local communities and provide access to finance at a local level. The purpose of cooperative banks is value creation for their members as opposed to the profit maximization that defines other types of banks. Each member of a cooperative bank has a vote in the strategy and the governance of their cooperative bank. The governance structures and strategies that guide cooperative banks today have their roots in ethical principles that were developed in the nineteenth century. Studying the history and recent developments taking place at Rabobank — one of the major Dutch banks — the chapter then addresses whether cooperative banking makes a difference in terms of governance, financial stability, conduct, and social responsibility.