This ring any bells?
“I fully understand the public outrage… I wish to give a crystal clear signal on behalf of the bank and on behalf of the Board. The Board deeply regrets that this happened and that this could have happened. It is all the more so because this type of culture and behaviour no way fits the standards and values of a cooperative bank That’s why I decided today to resign as Chairman of the Board of Directors. “
No, not our own Co-operative Bank. This was the statement put out yesterday by Pier Moerland in resigning as head of the Dutch cooperative bank Rabobank over the massive fine levied for Libor interest rate fixing, the story I covered in my blog last week.
Not a good period in the cooperative banking sector at the moment.
As if one bad-news cooperative banking story isn’t enough for one week, the Financial Times reports today that Rabobank faces a regulatory fine of almost a billion US dollars. Rabobank is a highly successful and well-capitalised Dutch cooperative bank with its roots in the farming sector. The national Rabobank is effectively a secondary cooperative owned by a network of local cooperative banks across the country. “In light of our cooperative mission, Rabobank elects to make the customer’s interest the starting point for its daily activities,” the bank’s website says.
The swingeing fine is for alleged manipulation of the Libor interbank lending rate. In Britain, Barclays and RBS have also been fined for Libor manipulation.
I can’t help thinking that a billion dollars of Rabobank’s capital would have been mighty useful if it could have been invested instead in our own Co-operative Bank.
The sad saga of the Co-op Bank drags on. Yesterday’s Guardian had an update on the moves by hard-nosed commercial Co-op Bank bondholders Aurelius and Silver Point Capital (both US-based) whose aim boils down to trying to wrest majority ownership of the bank away from the Co-operative Group.
My former colleague and friend Paul Gosling has been contributing some quite exceptional journalism on this affair in recent weeks in the trade magazine Co-operative News, and Paul was several week ahead of The Guardian in covering the Aurelius and Silver Point moves. Have a look at his piece here, for example.
The Co-op Bank says that it weighed up all sorts of solutions to its capital shortfall before plumping for its preferred scheme (which would see the bank – already legally a plc – become quoted, with minority ownership outside the coop movement). I have no insight into the bank’s senior management’s deliberations, but I hope that they looked into possible sources of capital from within the international cooperative banking sector, as well as looking to the commercial London and New York money markets. A much more satisfactory solution would have been for a listed Co-op Bank plc to be owned collectively by coop banks around the world, in partnership with the Co-op Group. Europe in particular has some very big coop banking beasts.
If this option was investigated and found wanting, it rather points up the urgency for the global coop movement of addressing the issues of capital.