Europe's Cooperative Banks Fare Better in Crisis

Before the global financial crisis, Europe's cooperative banks were seen as the refuge of the tradition-minded customer. Only one in five ­Europeans used their services; most consumers flocked to their mainstream commercial rivals whose mid-decade profits and stocks were soaring.

But co-ops have fared much better than their commercial counterparts during the downturn, in part because many shunned the dodgy vehicles that brought disaster down upon ­investor-owned banks. A recent report for the International Labour Organization found that "very few" co-ops needed government help in the crisis, and a study last year by Germany's Bundesbank concluded that co-ops are "farthest away from insolvency." Ratings agencies and consumers are impressed. Alone among Europe's private banks, the giant Dutch co-op Rabobank has preserved its triple-A status, and Britain's Co-operative Bank reported a 38 percent hike in new ­checking-account holders over the past year.

One reason for the newfound popularity: wary savers are seeking dependable banks that stay away from the capital-markets casino. And since co-ops don't have investors pushing for returns, they can pursue more risk-averse strategies that shield their clients from the market's vagaries over time. Europe's new banking model may be one of power for the people, not just the investors.

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