Is it just me or is anyone else wondering what has happened to the Cooperative Bank?
For years, and especially since the financial collapse of 2009, millions have looked to the Cooperative Bank as a practical example of cooperative values and business success. It was the jewel in the crown of the Cooperative movement with a high level of customer satisfaction and a check on the greed of the commercial banks. Yet in just a matter of months we seem to have gone from a cooperative success story to a catastrophe for cooperative principles and values
So far those involved seem more concerned to protect their own reputations than provide an explanation of how we (and I speak as a Co-op member of many years standing) have arrived at a situation where 70 per cent of the bank is now owned by a set of American hedge funds. I understand that there may be commercial sensitivities and legal concerns but I cannot believe that such new owners will respect the ‘ethical values’ of the Cooperative movement. I am not a banker but even I know that’s not why hedge funds exist. To use an old-fashioned term, they tend to be asset-strippers – looking to maximise value in the short term, sell to make the maximum profit and move on.
What are the implications of this for the thousands of staff and millions of members, not to mention the Manchester economy where the bank is currently based? Perhaps there is a good news story in all of this (if you believe the slightly tortured testimony of Peter Marks – the former chief executive of the Cooperative Group to the Treasury select committee this week). As a layman I can only see bad news all the way along and if the Cooperative Group is not careful it won’t stop at the bank.
So the silence from senior managers within the Cooperative Group is deafening. It was greed and shortsighted management that saw the collapse of building societies two decades ago. I really can’t believe the same is about to happen to the Cooperative movement. We need to hear soon and in detail how it will recover from this disaster and its ambitions for the future. If the board and management need help in starting this conversation with its members and the wider public it could start with one word – ‘Sorry’.
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Paul Wheeler is a bewildered member of the Cooperative and holder (for the moment) of a Cooperative bank account. He tweets @Paulw56
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