Co-Operative Banking; An Alternative Finance After the Global Crisis

Abstract: Co-operative banking has the longest historical background in finance, while the foundations of the banking system lay on the ground of a “large scale, mutually beneficiary, liquidity buffer”. The banking system is being under a constant dispute, be it ideological, religious, philosophic, political, academic or scientific. The global financial crisis, which has been ignited by a misunderstanding between the banks shareholders, the real estate operators, the workers and the stock exchange market operators is becoming a lack of currency, mainly because the money referred to, existed only as accounting figures. The co-operative banks are using only real money in their operations. They borrow real money from their members – depositors and they lend these fiat money to their members in need for credit. Such a banking system, operating in parallel in most EU countries, is becoming an alternative source of liquidity for the SMEs and a secure deposit for the citizens. Examining the published results of a sample of co-operative banks and their similar institutions, in some EU countries, shows an increment of their volume of transactions, as the financial crisis was deepening, indicating some correlation.