Credit Cooperative Institutions in European Countries (eBook)

Preface 6
Contents 10
Part I: Credit Cooperative Systems in Western Europe 12
Cooperative Banks in the Austrian Banking System 13
1 Historical Development 13
2 Legal and Tax Framework 17
2.1 Cooperative Law and Taxation 17
2.2 Banking Law 19
3 The Cooperative Banking Sectors in the National Banking System 20
3.1 Volksbanks 22
3.2 Raiffeisenbanks 23
4 Reorganization and the Future of the Cooperative Banking Sectors 24
5 Development in Progress 25
References 26
Co-operative Credit Institutions in Cyprus 29
1 The Establishment and Evolution of the Credit Cooperative System 29
2 The Current Model 32
2.1 Minimum Capital Required for the Establishment and Function of a Cooperative Bank 33
2.2 State Tax Policy and Way Credit Cooperatives Distribute Surpluses 34
3 The Importance of the Credit Co-operative System in the National Banking Market 35
4 Crises Problems and Changes 41
5 The Future of the System 45
References 49
Co-operative Banks in Finland 52
1 Evolution of Credit Co-operatives in Finland 52
2 Current Model 56
3 The Importance of Co-operative Banks 59
4 The Influence of the Crisis 60
5 Conclusion 62
References 62
Cooperative Banks in France: Emergence, Mutations and Issues 64
1 Introduction 64
2 French Cooperative Banks and Their Evolution 65
2.1 The First Phase (from the Late Nineteenth Century to the Great Depression): Birth and Rapid but Regulated Development 66
2.2 The Second Phase (1945 to the Beginning of the 1980s): Consolidation and Compartmentalization 67
2.3 From 1980 to Nowadays: The Period of Mutations 68
3 The Current Model: Predominance of Retail Banking 69
3.1 From the Network to the Cooperative Group: Between Inverted Pyramid, Hybridization and Concentration 71
Box 1: Overview of Cooperative Banks in France in 2014 73
3.2 Three Cooperative Banking Groups 74
3.3 Characteristics in Common 78
4 Recent Trends and Issues 80
4.1 Regulatory Reforms 81
4.2 Mergers, Alliances and Internal Concentration 82
4.3 Diversification and External Growth: Hybrid Groups and European Banking Consolidation 83
4.4 A Cosmetic Reconquering of Membership? 84
5 French Cooperative Banks During the Financial Crisis 85
Box 2: European Cooperative Banks During the Financial Crisis 85
6 Conclusion 87
References 89
The German Cooperative Banks. An Economic Overview 91
1 Introduction 91
2 The Background and Size of the German Cooperative Banking System 96
3 The Institutional Framework: The Associative and Entrepreneurship Level 103
3.1 The Entrepreneurship Level 103
3.2 The Associative Level 107
4 Economic, Legal and Regulatory Relationships Within the Cooperative Network 110
5 Concluding Remarks 115
References 117
The Greek Cooperative Credit System 119
1 The Establishment and Evolution of the Greek Cooperative Credit System 120
1.1 The Status Before 1992 120
1.2 The Status After 1992: The New Legal Framework 121
2 An Autonomous and Non-homogenous Development 122
2.1 An Autonomous Development 122
2.2 Concentration of Development 123
3 Part of Cooperative Banks in the Greek Market 126
4 The Crisis´ Consequences on Greek Cooperative Banks 130
5 Conclusions 132
References 133
The Financial Co-operative System in Ireland 135
1 Introduction 135
2 Establishment and Evolution 136
3 The Current Model 138
3.1 Services 138
3.2 Membership 142
3.3 Organisational Structure and Governance 144
3.4 Financial Structure and Performance 147
3.5 Stabilisation and Compensation 149
3.6 Moves Towards Rationalisation 152
4 Future Outlook for the Irish Credit Union Movement 153
References 154
Italian Credit Cooperative Banks 156
1 Introductory Note 156
2 The Establishment and Evolution of the Credit Cooperative System 157
3 The Current Model 159
4 The Importance of the Credit Cooperative System in the National Banking Market 164
5 The Recent Trends 165
Appendix: Tables and Figures 168
References 174
Rabobank Before, During and After the Credit Crisis: From Modesty via Complacency to Fundamental Steps 175
1 Introduction 175
2 Organisational Transformation 176
2.1 The Origins 176
2.2 The Evolution of Rabobank: Local-National-International 177
Libor 179
3 Salient Governance Developments 180
3.1 The Causes and Outcomes of the Great Cooperative Debate (1995-1998) 180
Decisive Strategic Ambitions Since 1998 182
3.2 Legally Independent LCBs in a Highly Integrated Group (1896-2015) 183
3.3 The Switch to One Banking License and One Consolidated Balance Sheet in 2016 185
4 Present Market Position and Recent Performance 187
4.1 Members 187
4.2 Domestic Market Shares 188
4.3 Profitability 189
4.4 Capitalisation and Ratings 190
4.5 Cost to Income Ratio 191
4.6 International Activities 193
5 Concluding Remarks 194
References 195
The Portuguese Cooperative Credit System 197
1 Introduction 197
2 The Genesis 198
3 Crédito Agrícola in Portuguese Banking 202
3.1 Regional Development 207
3.2 Internationalization 208
4 Structure and Governance 209
5 Conclusions 216
References 217
The Credit Cooperative System in Spain 218
1 The Establishment and Evolution of the Credit Cooperative System in Spain 218
2 The Current Model 224
2.1 Governance and the Mutual Spirit: The Reasons for the Creation of Cooperative Banks 224
2.2 The Bank´s Activities with Members and Non-members 227
2.3 Other Services: Insurance, Stockbroking, Etc. 227
2.4 The Relation Between Local, Regional and Central Banks 228
2.5 The Minimum Capital for the Establishment and Functioning of a Cooperative Bank 229
2.6 The Guarantees System in Cooperative Banks 230
2.7 Profit Distribution in Credit Cooperatives 231
2.8 Tax Policy for the Credit Cooperative System 232
2.9 Credit Cooperatives Mainly Act as Deposit-Takers 232
2.10 Margins and Interest Rate Policy 232
3 The Importance of Credit Cooperatives in the National Banking Market 233
4 The Future of the System 235
Bibliography 236
British Credit Unions: Transformation and Challenge 238
1 Introduction 238
2 Establishment and Evolution 239
2.1 Origins of the British Credit Union Movement 239
2.2 Change and Transformation: 1999-2011 241
3 Legislation and Regulation 242
4 Government Support for Credit Unions 244
4.1 Financial Inclusion Growth Fund 245
5 Current Models of Development 246
5.1 Wide Variety in Organisational Capacity and Product Offerings 247
6 Economic and Organisational Challenges 247
7 The Future of the British Credit Union Movement 249
7.1 Rethinking the Credit Union Development Model 249
7.2 The Emergence of a Collaborative Approach to Development 251
7.3 Credit Union Expansion Project 251
References 253
Part II: Credit Cooperative Systems in Eastern Europe 255
Bulgarian Cooperative Banking 256
1 Introduction 256
2 The Bulgarian Economic System 257
3 The Financial and Banking System 258
3.1 From the Soviet Period to the 1996-1997 Crisis 258
3.2 The Current Situation 260
4 The Cooperative Credit System in Bulgaria 263
4.1 The Central Cooperative Bank Plc 265
4.2 The Agriculture Credit Cooperatives 267
5 Conclusions 270
References 271
The Changing Role of Cooperatives andCredit Unions in Czech Economy 272
1 Introduction 272
2 Cooperatives and Credit Unions in Czech Republic: Historical Overview 274
2.1 First Period Till 1938 274
2.2 Second Period 1945-1989 275
3 Current Model: The New Era of Credit Unions 276
3.1 The First Phase: 1995-2005: The Overly Liberal Market 276
3.2 The Second Phase 2006-2013: The Credit Unions Legislative Changes 279
4 Credit Cooperatives in the National Banking Market 280
4.1 The Influence of the Crisis 2007-2011: The Birth of a New Sector 280
4.2 Interventions of the Czech National Bank 2011-2013: Attempts to Eliminate Risks in the Credit Union Sector 281
4.3 The Third Phase 2014-2018: Prevention of the Credit Union Growth 282
5 The Future of Czech Credit Cooperatives: Transformation to Banks? 284
References 285
Credit Unions in Estonia 286
1 Introduction 286
2 Main Characteristics of Estonian Credit Unions and Co-operative Banking Sector 287
3 Development Problems of Estonian Credit Unions 288
4 Statistical Overview of Estonian Credit Union Sector 289
5 Conclusion 293
Reference 293
The History, the Current System and the Special Features of Savings Cooperatives in Hungary 294
1 The Establishment and Evolution 294
2 The Previous Model (Until 2013) 298
2.1 The Cooperative Credit Bank System in Hungary Until 2013 298
2.1.1 Savings Cooperatives 299
2.1.2 Credit Cooperatives 299
2.1.3 Regional Savings Cooperative Alliances 300
2.1.4 Institutional Defense Funds 300
2.1.5 Central Bank 300
3 Internal Operation, Management 301
4 Membership Policies 301
5 Business Policy 302
6 Cooperative Principles in Savings Cooperatives 303
7 Changes in the External Regulation 304
8 The Current Model 308
9 The Importance of the Cooperative Sector in Hungary 308
10 Summary 309
Bibliography 310
Cooperative Savings and Credit Unions in Latvia 311
1 Establishment and Evolution of Latvian CSCUs 311
1.1 Latvian CSCUs Before II World War 311
1.2 Latvian CSCUs After 1991 314
2 Current Model and Operation of CSCUs in Latvia 317
3 Latvian CSCUs and Financial Crisis 2008-2010 325
4 Conclusions 327
References 327
Credit Unions in Lithuania 329
1 The Establishment and Evolution of Credit Unions´ Network in Lithuania 329
1.1 Historical Background of Credit Unions in Lithuania 329
1.2 Evolution of Legal Environment for Credit Unions 330
1.3 Growth of Credit Unions in Lithuania 334
2 The Current Model of Credit Unions´ Network in Lithuania 335
2.1 The First Level: Structure and Activities of Credit Unions 336
2.2 The Evolution of a Second Level of Credit Unions´ System 337
3 The Importance of Credit Unions in the Lithuanian Banking Market 339
4 Economic Crisis Effects and the Future of Credit Unions Network in Lithuania 340
5 Conclusions 341
References 342
The Polish Credit Co-operative System: Historical and Contemporary Experiences 344
1 Historical Heritage 344
2 The Credit Co-operative System in the Time of Free: Market Transformation 352
3 The New Movement: The Past Inspired Again 358
4 Struggle for Independence 359
5 Supporting Social Economy 361
6 Conclusion 363
References 363
The Credit Cooperative System in Romania 364
1 The Establishment and Evolution of the Credit Cooperative System in Romania 364
2 The Current Credit Cooperative System in Romania 367
2.1 The Establishment and Organization of Credit Cooperative Organizations in Romania 367
2.2 Functioning of Credit Cooperative Networks in Romania 369
2.3 CREDITCOOP Network 371
2.3.1 Organizing CREDITCOOP Network 371
2.3.2 The Main Activities of Cooperative Credit Organizations in CREDITCOOP Network 372
2.3.3 Analysis of Credit Cooperative Organizations in CREDITCOOP Network 374
3 The Part (Importance) of the Romanian Credit Cooperative System in the National Banking Market 375
References 378
Credit Co-operatives in Serbia: Retrospect and Prospect 380
1 Introduction 380
2 Setting the Scene: The Legal Framework for Credit Co-operatives in Serbia 381
3 A Detailed History of Credit Co-operatives in Serbia 383
3.1 The Development of Saving and Credit Co-operatives in Serbia Prior to the Second World War 385
3.2 Credit Co-operatives in Serbia in the Period After Second World War Until 1989 389
Box 1: Case Study of Agrobanka and Concept of Co-operative Savings and Crediting of Farmers 391
3.3 Credit Co-operatives in Serbia in the Transition Period from 1989 392
Box 2: Case Study of Railway Saving and Credit Co-operative 395
4 What Next for Credit Co-operatives in Serbia? 397
4.1 The Need and Potential for Credit Co-operatives in Serbia 397
4.2 Credit Co-operatives in an Integrated Rural Co-operative System 399
4.3 Building a Credit Co-operative Network 400
4.4 Remaining Obstacles for Saving-Credit Co-operatives in Serbia 401
5 Conclusion 403
References 404
Credit Co-operatives in Slovakia 406
1 The Developmental Stages of Credit Co-operatives in Slovakia 406
1.1 The Beginnings of Credit Co-operatives in Slovakia 406
1.2 Development of Credit Co-operatives in Slovakia 409
1.3 Deformation of Credit Co-operatives in Slovakia 411
1.4 Transformation of Co-operatives in Slovakia 413
2 Present Operation of Co-operatives Under the Commercial Code 413
3 The Inaugural Meeting Elects the Co-operative Bodies: The Board and Control Commission 415
4 Conclusions 417
References 418
From Credit Cooperatives to Cooperative Bank in Slovenia 419
1 Introduction 419
2 The Development of Cooperative Financial Institutions in Slovenia 421
2.1 Credit Cooperatives as a Backbone of the Slovenian Cooperative Movement Before WWII 421
2.2 The Period from the End of the Second World War to Slovenian Independence (1945-1991) 426
2.2.1 The Winding Up of the Pre-war System and a Short Period of Cooperative Savings Associations 426
2.2.2 The First Slovenian Act About Savings and Loan Services (1969) 427
2.2.3 The Legislation Regarding Savings and Loan Services from 1980 to 1990 and the Establishment of the Slovenian Agricultura... 428
3 The Current Model After Adjustment to the Banking Legislation 430
4 Additional Measures in Dezelna banka Slovenije Ltd and Extraordinary Measures in the Banking System After the Outbreak of th... 434
5 First Signs of Recovery 437
6 Cooperatives as Shareholders of Dezelna Banka Slovenije Ltd and the Bank´s Vision for the Future 438
7 Concluding Remarks 441
References 442