It's been a terrible month for those of us who have been part of the Co-operative Bank since it's move to ethical banking policies in 1992. Way back then, I had been part of the LAMB campaign, (Lloyd's and Midlands Boycott) trying to get people out of the banks most involved with indebted 'third world' nations.
The trouble was, all of the banks had dodgy connections - so it was hard to argue for people to 'ethically' boycott a bank, and open a new account with one that had connections with the arms trade or something equally dubious.
At a senior level, efforts were being made to convince the Co-op bank to go further than simply being the bank that trade unions used, to one that adopted a serious ethical stance to investments.
When they launched the Ethical banking policy, we were ready. We passed a motion through the Bradford university student's union, and became the first student union in the country to completely boycott our previous bank (Lloyd's) and embrace the Co-op. I was then invited to work with the Co-op, going around the country with a staff member of the bank, explaining to other unions why they should follow suit. Over the next 2 years, over 40 student unions followed suit - and the Co-op's ethical stance had proven to be a huge success story for the bank.
In Bradford, it had the confidence to open a new branch, in a beautiful building by Alfred Waterhouse (he designed the Natural History Museum) as hundreds of students closed their bank accounts with the big four, and switched to ethical banking. This was replicated throughout the country and the bank went from strength to strength. It was owned by its members, so all profit went back into movement.
For nearly 2 decades, being a part of the co-operative bank was something to be proud of, a truly ethical alternative to banking greed.
Then it all went horribly wrong. The view from insiders is that as the banking arm grew, managers were brought in who did not hold the values of those who had worked in the Co-op for years. Greed and more commercial interests were beginning to take hold. Then, the Co-op bank took over 'Britania' building society, trying to expand its market into mortgages. Somebody had not done the research, and the Co-op took on the Britania's vast mount of toxic debt. It was only the ill-fated decision to try and buy the Lloyd's bank branches that exposed the whole sorry mess and led to the self destruction of the Co-op. A £1.5 Billion gaping hole made them susceptible to a 'rescue' takeover.
Now two US 'Hedge funds' rule the roost, one, 'Aurelius Capital Management' are connected to 'vulture funds' trying to force debt repayments from Argentina and the second, 'Silver Point Capital' are connected to the gambling and the automobile industry (and, more sinisterly, Krispy Kreme Doughnuts!) Not quite the ethical corporates you would want owning 70% of the Co-op bank.
I think that there is no saving the Co-op, it will never return to being a mutual bank, owned by its members. It will be run in the interests of its investors. We can (and should) fight to keep it's 'ethical banking' values but in truth perhaps it is time to start looking elsewhere for an ethical place to invest our savings. A little in a local credit union goes a long way, and I recommend putting some in 'Shared Interest', which loans to fair trade companies in the global South. We are looking at other mutuals, like the Nationwide, and perhaps even 'Triodos bank' might be worth investigating. But I can't help but be furious at the people who have gambled away the easiest and most ethical way to Bank in the history of British banking. It is a sad week indeed, and the loss will be felt for years to come.