The recent reform of the Cooperative Credit Banks (CCBs) recently approved by the Italian Council of Ministers raises legitimate concerns regarding the policies pursued by the banking system. In particular, misgivings stem from the norm enabling the larger sized CCBs (with at least Euro200 million in capitalization) to withdraw from the cooperative system by transforming themselves into joint stock companies and paying a 20% tax on the reserves set aside during decades of banking activity. The overriding sense of apprehension is heightened by the fact that this reform comes one year after the one applied to the large “banche popolare” now absorbed in major merger ventures, and only a few months after the scandals connected with the bad management of some local area banks.
This reform may prove to be dangerous in addition to being unjust because it seriously impacts various aspects of economic democracy, which during these last few years has already been challenged by a centralized approach to public issues, albeit in the absence of any real industrial policy.
First of all, challenged is the fundamental role of cooperativism for social and economic development: it is a matter of a propulsive capacity that has already proven its worth in the country’s economic history, and can assume renewed importance in the current context of economic post-crisis. As Benedict XVI stated in Caritas in Veritate: “It is the selfsame plurality of the institutional forms of enterprise that generates a market which is more civil and at the same time more competitive”. The weakening of the ‘biodiversity’ of the organizational forms in the sphere of banking runs the risk of impoverishing local areas, while at the same time depriving them of institutes attentive to local development and assets for social use accumulated during long years of prudent management. As the economist Stefano Zamagni recently asserted: “There is a blatant violation of the legal principle whereby the funds set aside as reserves of the CCBs are untouchable and indivisible, because they are reserves that have been accumulated down through the decades under tax exemption coverage, and hence belong to the citizens and not to the bank”.
In second place, worrying is the resolve to centralize economic and financial powers, not wanting to recognize the subsidiary value of local enterprise in financial affairs. While it is true that international competition requires the creation of huge banking groups able to stand their own with similar banks in Europe and the rest of the world, it is equally true that the vocation of financial intermediation cannot be forgotten: collect savings and grant credit. Small enterprises and social development projects will suffer the most as a result of the increasing remoteness of decision making centers and bank gigantism.
The “betrayal” of the mutual aid vocation of the CCBs flags the risk that these banking experiences as well are destined to leave the local areas where they saw the light of day and lose the business culture proper to them, just like what happened to many a ‘people’s bank’ (banca popolare in Italian).
Denying the factual application of the principle of subsidiarity in the financial sphere is tantamount to globalizing solutions, overlooking “the complexity of local issues that call for the active participation of the inhabitants”, as Pope Francis writes in Laudato Si.
The third vulnus to economic democracy concerns the underlying idea of the equivalence between “bad management” of some banks and “bad business plan”: if it is true that in some cases the cooperative banks suffered an excessive thrust into growth and financial activities – with the ensuing loss of local roots and a radical change in the function of economic development – such forms of conduct are to be stigmatized and prevented through better control systems, but they cannot lead to generalized assessments. If the national banking and economic system are in good health, great merits for that can be attributed to the cooperative model, and those merits are to be acknowledged, preserved and promoted.
The hope, therefore, is that there will be a radical rethinking of the part of the reform that pushes the CCBs in the direction of withdrawing from the cooperative world and towards betraying their own vocation, a “daughter” of the principles of the Social Doctrine of the Church. Compared with the situation today, never before in the past has the economic world manifested such a thirst for humanization. This world will continue to have its thirst quenched only if free cooperative enterprise will continue to live and prosper.