Abstract
This chapter summarises the main trends that have affected cooperative banks from the beginning of the crisis, in particular as concerns tightening regulation, structural low return on traditional banking services and increasing digitalisation. While underlying the necessity to restore profitability as a fundamental prerequisite to sustain their way of doing banking, a few elements are also discussed in the light of further adapting the cooperative banks’ business models. In this respect, it is argued that a structured discussion should be launched as concerns the possibility to (1) rethink the concept of proximity, (2) embrace the policy movement supporting sustainability, (3) improve the way the cooperative difference in banking is communicated and (4) seize the possibilities of digitalisation and not leave the lead to fintech.
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Notes
- 1.
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.
- 2.
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.
- 3.
Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council.
- 4.
A new agreement on the partial revision of the Basel Accord was reached the 7th of December 2017, consisting in a proposal on risk evaluation methods that will probably lead to a non-negligible increase in risk weighted assets for nearly all banks.
- 5.
See Sect. 10.4.1.
- 6.
This technology-driven tendency can be observed in other industries. Noteworthy are the cases of Airbnb, leader in the short-term real estate renting sector without owning any real estate; Netflix, leader in the home entertainment sector producing only a portion of the contents proposed to its clients; or Uber, emerging leader in the urban transportation sector without owning any car.
- 7.
Directive 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC.
- 8.
See in this respect the reform of Banche Popolari launched in Italy in 2015 (where all the Banche Popolari with total assets higher than EUR 8 billion have been transformed in joint-stock companies ) or the high level of hybridisation already reached by some large cooperative banking groups or networks .
- 9.
Even identifying what are the shared values of a local community is becoming more complicated, in particular due to the increasingly cultural heterogeneity that can be today observed in the citizenship composition, even at local level. To this extent, it is worth mentioning that the first cooperative banks adopting the Raiffeisen model were mainly created by rural communities sharing Cristian values and practices.
- 10.
As an example, for the Italian Banche di Credito Cooperativo members must have their domicile and/or continuative business within the territory where the bank operates and 95 per cent of the lending must be in the municipalities where the bank has a branch and the neighbouring ones.
- 11.
The Paris Agreement’s aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. Additionally, the agreement aims to strengthen the ability of countries to deal with the impacts of climate change. To reach these ambitious goals, appropriate financial flows, a new technology framework and an enhanced capacity building framework will be put in place, thus supporting action by developing countries and the most vulnerable countries, in line with their own national objectives. The Agreement also provides for enhanced transparency of action and support through a more robust transparency framework (Source: UNDP website, http://unfccc.int/paris_agreement/items/9485.php).
- 12.
While the SDGs are not legally binding, governments are expected to take ownership and establish national frameworks for their achievement.
- 13.
A possible distinctive role of cooperative banks in helping SMEs to reach the financial markets in the framework of the introduction of new market-oriented financing instruments in the EU agriculture has been recently analysed by Migliorelli and Dessertine (2017).
- 14.
A similar phenomenon can be already observed in other industries. For example, Anselmsson et al. (2014) showed that in the fast-moving consumer goods (FMCG) industry, a market premium exists for companies that are able to be perceived as having a positive social image, being unique, having a link with the home country or having a positive corporate social responsibility (CSR) approach.
- 15.
On the other hand, digitalisation as a lever of cost reduction and streamlining of operational processes is something that the banking industry has already largely embraced to support reorganisation initiatives.
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Migliorelli, M. (2018). Cooperative Banking in Europe Today: Conclusions. In: Migliorelli, M. (eds) New Cooperative Banking in Europe. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-93578-2_10
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