FT Guide to Banking

12

The mutuals

In this chapter we will examine a group of organisations that perform important banking functions often without carrying the title ‘bank’. Collectively, these mutually-owned, rather than shareholder-owned, institutions form a very significant part of the financial system in many countries. Whereas universal banks have diversified into an amazing array of services the mutuals tend to emphasise the original function of banks; taking and looking after customers’ money and lending to them, for the most part without the excessive profiteering and speculating that have been seen in many commercial banks. Mutuals’ purpose was and still is to encourage people of limited means to save and allow them to borrow, often for the purpose ...