The Cooperative Bank seems in deep trouble, pressed upon by the Ex Britannia bond holders and the vulture funds, Aurelius and Silver Point Capital. In an ideal world the latter would be sent packing with nothing to show for their predatory action. The bond holders have been let down.
Most account holders at the Coop Bank bank with it precisely because it is detached from the City. To float the Cooperative Bank on the stock exchange is a betrayal. The Cooperative group trades on the legacy of the Rochdale Pioneers who themselves had benefited by learning from previous cooperative pioneers . The modern Cooperative Group is nominally cooperative in culture, the upper echelon paying themselves huge salaries while they do a poor parody of corporate capitalist culture.
The elections to the cooperative groups governing body are weakly democratic. This worst with some other mutuals and in so far that they have any democratic basis this is nominal . Their structures are mutual and cooperative but as cultures are all but dead. There are consequences as top functionaries take over and gradually work in favorable privileges to themselves. The top functionaries at the Cooperative Group (and Nationwide) are on fat cat salaries, the performance is sometimes mediocre ; with supermarket customer satisfaction scoring 48% one of the lowest scores and only 3% above Tesco, way below what Waitrose scores. In the Coop group the lowest pay is a few percentage above the minimum wage. though there are discounts for staff. The Waitrose and John Lewis Group are succesful business but as time goes salary differentials have grown from 25:1 to 75:1. This is usually an index of power relations within the enterprise and is bending over time to the norms of corporate and financial capitalism.
During elections there are short statements sent out by each candidate. Apart from that there is poor communication with the membership. Election results do not seem reported there are probably few people voting so poor membership engagement. Though surveys show that members tend to be loyal customers. No reports are given of meetings, what was on the agenda or what was decided on . As in most cooperative or mutual enterprises a culture of passive membership is encouraged. Transparency is poor and it seems strange how long the Cooperative Group kept up the illusion that the Verde deal was still on and that they were to become a challenger bank, instead the amalgamation with the Britannia was sinking them. They spent millions on ” consultants” from dubious banks. All the time selling themselves as “ethical” and ‘Good with money”. Would all this have happened if the membership, be they staff or customer, demanded proper accountability, were more engaged and informed? Why is there no wage solidarity, limiting wage differentials and a commitment to a living wage? Add to this the miss-selling of so-called “financial products” and subsequent fines, it all add up to tragedy especially for Cooperative Bank account holders, who direct the care of their cash in the hope that any benefits will be more conducive to social ends. It is a breach of trust.
A part nationalization of the Cooperative Bank if done in a benign way might be a solution. The account holders might be given a chance to indicate if this is congenial and might be so given their likely profile of social attitudes . Ways of protecting the bond holders could be found. Instead of retaining the Cooperative bank as a PLC it could be converted into a hybrid national trust mutual , meaning a mutual bank, with the government on behalf of the nation holding a stake. This would be a partnership between state and the members. To get around crude political or Treasury interference, the nationalized stake could be supervised by a parliamentary sub committee. The account holders and staff could elect their own representatives on to the governing body.
This a hope too far under present circumstances. The truth is that alternative to corporate and financial capitalism is hard pressed and handicapped, be they small embedded business or cooperative enterprises. In the so-called free society we have few options than to be swept into the powerful storm of the effects of huge volumes of liquid funds chasing a quick profits in a frenzy of trades, global bond, stock and commodity markets. The soviets may have gridlocked their societies into crass bureaucratic centralism but we are caught up in grip of madness of commodification of most aspects of our lives which is put into play on the markets. The effects are often cruel and destructive but the crassness takes another form, the ‘freedom” of those that can afford to pay. These will retreat into gated favoured spaces with high security. While many of the rest fall into dependency on food banks.
A social bank under stakeholder democracy is fundamental if any progress is to be made in the democratization of wealth, investment funds and other aspects of the economy. The turn around point has yet to be reached but then this will need clear practical ideology, with a critical mass of support and determination. Opposition alone is not sufficient and has to complemented by effective counter-positional reconstruction. This is rational possible but what is so, is often not possible and under present prevailing practice and attitudes unlikely . The Cooperative Bank is probably lost as such.
PS Added October 21st; Things seem to be going worst for the Cooperative Bank Link here