The German Cooperative Banks. An Economic Overview

Cooperative banking has a long and well established tradition in German speaking countries and in Germany in particular. The cooperative financial network basis on the Raiffeisenbanken and Volksbanken, member owned financial intermediaries. Although local banks in terms of operational territory at single level, the credit unions are able to offer their customers and members an extensive range of financial services due to the close cooperation with their specialized product institutes within the cooperative banking network, the so called Finanzverbund. In that sense the Raiffeisenbanken and Volksbanken might be viewed as pocket universal banks. In this context, the present study—given a general background of the cooperative credit system within the overall German banking market—focuses on the institutional framework of the cooperative system, both on the entrepreneurship and associative level, considering its legal and economic relationship in order to highlight its specialness also in terms of potential replicability in other national experiences. Summary: (1) Introduction; (2) The Background and Size of the German Cooperative Banking System; (3) The Institutional Framework: The Entrepreneurship and Associative Level; (4) Economic, Legal and Regulatory Relationships within the Cooperative Network; (5) Concluding Remarks;