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Title: Morality and Integrity in Cooperative Banking
Author(s): GROENEVELD, Johannes M.
Journal: Ethical Perspectives
Volume: 18    Issue: 4   Date: 2011   
Pages: 515-540
DOI: 10.2143/EP.18.4.2141846

Abstract :
Cooperative enterprises are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others. With reference to these historical and universal cooperative values, cooperative banks have repeatedly and publicly stated that they have always acted primarily in the interests of their members and customers. They also state that this approach has led to a dominant focus on relationship banking with a moderate risk profile and attention to several different stakeholders. The financial crisis offers a good opportunity to verify many of the longstanding assertions of cooperative banks. The present contribution concludes that this specific form of enterprise has proven rather successful in the recent turbulent financial times. Corporate governance with member ownership and influence has ensured the application of relatively high moral and ethical standards in their daily business and contacts with members, who are both the customers and the owners of cooperative banks at one and the same time. Their presence contributes to diversity and a balanced competitive environment in banking. A key conclusion is that cooperative banking is not a panacea for post-crisis banking in general, but should be viewed as an interesting alternative to the Shareholder Value banking model, or the private/commercial banking model, which has been in the spotlight much of the time in recent decades.

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