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Cooperative Banks in Europe--Policy Issues

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Author Info
Wim Fonteyne
Abstract

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.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/159.

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Length: 68 pages
Date of creation: 13 Jul 2007
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Handle: RePEc:imf:imfwpa:07/159

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Keywords: Working Paper ; Banks ; Europe ; European Union ; Bank supervision ; Profits ; Financial stability ; Financial systems ; Governance ;

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Derek Jones & Panu -Kauhanen Kalmi, 2009. "The Effects of General and Firm-Spesific Training on Wages and Performance: Evidence from Banking," Discussion Papers 1184, The Research Institute of the Finnish Economy. [Downloadable!]
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