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Cooperative failings.(cooperative banks in Germany)

Cooperative banks in Germany are envied by their counterparts in the private sector because of their solid franchise base. Small banking institutions such as Volksbank and Raiffeisenbank are popular among small businesses in Germany, especially small-scale manufacturers, farmers and tradesmen. Still, cooperative banks suffer from serious management flaws that make them highly vulnerable to risks, including the employment of underqualified managers, the use of inadequate risk management systems and too much dependence on low-interest deposits.

Are the cooperative banks doing the right business badly or the wrong business rather well? asks Laura Covill in Frankfurt

Underqualified ...

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