It’s the morning after the day before… and, particularly in the light of those posts appearing from unhappy Co-op Bank customers pledging to move their accounts, it seems natural today to ask what we have left in terms of cooperative and values-driven banking in Britain.
The short answer is that cooperative banking in Britain, unlike many other European countries, has effectively meant just the Co-operative Bank, originally established in 1872 to serve the 1000+ local consumer co-operative societies. Elsewhere in Europe co-operative banking grew not from consumer co-operation but from what we would now describe as locally based credit unions. If you’re interested, you’ll find a piece I wrote in the summer for The Guardian on European coop banking sector (and there are some very big banks involved) here.
What Britain did have (at least until the wave of demutualisations following the Thatcher-era Building Societies Act) was a thriving mutual savings and mortgage loans sector. The largest remaining mutual mortgage lender by a very long way is the Nationwide Building Society, of course. As a footnote, the Nationwide was originally directly associated with the cooperative movement (it changed its name from the Co-operative Permanent in 1970). As a result of Co-operatives UK’s wooing of the mutual sector, the Nationwide has recent chosen to become a Co-ops UK member.
Triodos Bank has been an innovative player in Britain in relation to ethical investment for almost twenty years, since the parent Dutch bank took over a small Rudolf Steiner-inspired UK bank in 1995. Triodos’s own roots are in the Steiner movement (or anthroposophy, if you prefer), although the bank dropped its formal links with the Steiner movement in 1999. It is not cooperatively structured, and indeed its internal structure is complicated (I last wrote about Triodos in detail for The Observer in 2004). Its shares are held entirely by a Foundation with the mission of protecting the original principles of the bank, but a form of quasi-equity (so-called ‘depository receipts’) is made available to both individuals and institutions. Incidentally, a Dutch cooperative bank is the largest institutional shareholder in Triodos, with a 6.6% holding of depository receipts. Peter Blom, a Dutch banker, has been in charge since 1989 and there’s an interesting video interview with him where he discusses among other things Steiner’s influence and Triodos’s approach to money on YouTube.
The Charity Bank is owned by CAF, the Charities Aid Foundation (the “charities’ charity”). It offers savings products but not personal banking. Unity Trust, owned by trade unions and with a minority shareholding from the Co-operative Bank, offers banking for charities and the not-for-profit sector but not for individuals.
And last but not least is Britain’s growing credit union movement. Britain was a late developer in terms of credit unions (perhaps because of the reach of building societies) and not everything over the past twenty years has been entirely plain sailing but Britain does now have some established and strong credit unions, the largest of which offer basic personal banking. I wrote earlier this year on credit unions for the magazine Choice, and you’ll find this article on my website here.