Lessons Learned
May-June 2009
Ever since the financial crisis fell upon the United States and expanded throughout the world, there has been very little good news on the economic front. Everything seems paralyzed. People are worried, furious… or depressed. They say that prosperity is a great teacher, adversity a greater? So I thought this would be a good time to see how cooperative organizations are coping in this time of crisis. I didn’t have to investigate very long. In my view, it’s as clear as day: cooperatives are getting by much better in these harsh economic times and have become very appealing to the average citizen.  

Could this that the tables have turned and we’re being rewarded? Last December, the United Kingdom’s Co-operative Bank noted a 65% increase in the number of citizens transferring their current bank balances into their cooperative’s coffers; furthermore, it has seen the value of its term deposits jump by 87% throughout 2008. In a recent issue of the ICA Digest, the International Co-operative Alliance further noted that, since the start of the crisis, a wave of new members has flowed into European financial cooperatives. In Switzerland, the Migros cooperative reported 46,000 new accounts and as for the Raiffeisen cooperative, it stated an additional 100,000 accounts. Credit unions have also taken over much of India’s private banks customers. Savers are seeking refuge, worried that banks will abandon them for lack of liquid assets. There is a real crisis of confidence! Meanwhile, small neighbourhood cooperatives are emerging as the “people’s banks.”

Pete Crear, President and CEO of the World Council of Credit Unions (WOCCU), reported that during the months of September and October of last year, in the midst of all this confusion, financial cooperatives received additional deposits equivalent to some 22 billion dollars US, this amount represents one third of their total deposits. That’s a lot of peanuts! Meanwhile, a non-cooperative bank was pulling out each week during this same period.

Here in Canada, the transfer of bank assets to cooperative organizations may not be as remarkable because, let’s admit it, our banks are well regulated. Nonetheless: the Desjardins network has demonstrated the strength of a cooperative basis. At the end of the latest financial exercise, deposits and capitals ratios were above those of Canadian banks. Credit ratings are excellent. What of the infamous Asset Backed Commercial Paper (ABCP)? The Desjardins network had very little of its own, however it did cover significant quantities owned by its members and institutional clients. – I bet that a large number of Quebeckers’ pension funds were among those stuck with devaluated ABCPs. – Let’s not forget that when the Desjardins network charged its surplus this year it was as a gesture of social accountability. But the media either did not or barely made note of the subtle nuance. Our credit unions are doing well. Thanks to their own capital, which provides them with a more stable foundation than that established by share capitals, and thanks to their network-based organization, which provides them with a local anchor and an international scope, the Desjardins network is truly our banking system’s flagship institution.

I am not saying my research was comprehensive but it does seem conclusive. When things are bad, people are looking for secure, reliable and honest organizations. Business ethics are suddenly taking on greater importance. Will the powers that be finally have the audacity to endorse cooperatives? We aren’t some strange species from a bygone era. Our cooperative values, our contribution to a true economy, the fact that we share our surplus with local communities and transfer our assets to future generations, all of it proves that we have learned our lesson well!


Colette Lebel, agr.
Director Cooperative Affairs
and Board Secretary Assistant
La Coop fédérée
Email: colette.lebel@lacoop.coop
Fax: 514 850-2567


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