tailieunhanh - MUTUAL BANKS AND STOCK BANKS ERIC RASMUEN

The very existence of European savings banks is rooted in the notion of assistance and support to the poor and the contribution to social progress. Savings banks foundations were indeed originally created specifically to combat poverty and social exclusion and its direct negative impacts. Savings banks’ actions in the social field now focus on providing means to encourage autonomy and initiative, rather than the simple provision of aid. They target people in fragile situations or who are seeking to attain self-reliance and benefit from long-term programmes with a specific mentoring along the various steps. A number of savings banks’ projects. | Mutual Banks and Stock Banks. Eric Rasmusen Published as Stock Banks and Mutual Banks Journal of Law and Economics October 1988 31 395-422. 1 would like to thank Kenry Kansmann David Kirshleifer John Wiley Ronald Masulis Maureen O Kara Brett Trueman and participants in the UCLA Sloan Workshop for helpful comments and Timothy Opler for research assistance. Introduction. Mutual associations are something of an oddity in a capitalist economy but they have long been significant in banking in the United Mutual savings banks credit unions and most savings and loans are mutual associations while national banks state banks trust companies and some savings and loans are stock I will refer to the two categories as mutual banks and stock banks. The difference between mutual and stock banks lies in who controls the bank and receives the profits. A stock company is owned by stockholders who vote for the firm s managers distribute its profits and are free to sell their privileges. Depositors are merely customers. A mutual association is owned by its depositors but not controlled by them. As I discuss below the managers are effectively self-controlling limited only by government intervention. In savings and loan associations hereafter called S L s and credit unions each depositor has the rarely-exercised right to vote for the managers of the bank. In mutual savings banks authorized in only seventeen states including the New England states and New York the depositors lack even the fiction of control since they lack the right to Depending on state law the board of trustees that controls the firm is either selfperpetuating or elected by a self-perpetuating board of corporators. The trustees control is not absolute since blatant harm to the depositors interests could provoke legal action but depositors cannot otherwise influence the firm s policy except by withdrawing their funds. Since the managers of a mutual cannot be punished by stockholders they are .