Switching to small banks could help save the economy, expert says

Posted by er134 at May 30, 2013 03:15 PM |
University of Leicester School of Management’s Professor Martin Parker to speak at the House of Commons on Tuesday June 4

Issued by University of Leicester Press Office on 30 May 2013

Supporting smaller banks could help the UK recover from the current financial crisis, a  management expert will argue at a House of Commons event next week.

Professor Martin Parker, of the University of Leicester’s School of Management, will explain why backing “mutual” institutions, such as credit unions, small building societies, ethical and community banks should be considered a viable alternative to pouring millions into “too big to fail” big banks.

He will give his views at a House of Commons event exploring “The Role of Mutuals in Retail Financial Services” on Tuesday, June 4.

Mutual institutions differ from public limited companies (PLCs) in that each voting member has only one vote – whereas in PLCs, the numbers of votes members have depends on the numbers of shares they have purchased.

As a result, large institutions which own millions of shares in a PLC will have much more say than thousands of members who only own one share each.

Professor Parker, a specialist in organisation and culture, argues that, since the practices of large PLC banks are to blame for the 2008 banking collapse and the subsequent global financial crisis, it is time for policy makers and the public to support an alternative. Mutual institutions could be the answer.

Professor Parker said: “Dominant ideas about finance and banking have resulted in this Great Depression. Exploring alternatives means rethinking the purpose of banks. What are they for, and who are they for? At the moment, they seem to work well for bankers, but not for ordinary people.

“Perhaps an answer is smaller banks, and a return to the mutualist ideas that motivated early building societies, as well as credit unions, peer to peer lending and micro finance. I will be using the examples of Triodos Bank, Burnley Savings and Loans Ltd (the Bank of Dave) and the Global Alliance for Banking on Values.”

Professor Parker will speak in Room M, Portcullis House, House of Commons, from 9am to 10.30am on Tuesday, June 4. He will speak alongside Alison Robb, group director at Nationwide Building Society, and Paul Kearney, managing director and head of private investment office at Kleinwort Benson bank.

The event is part of the Industry and Parliament Trust’s Finance and the City programme.



For more information, please contact Professor Martin Parker on (0)116 252 5317 or at: mp431@le.ac.uk

To register, go to: http://events.ipt.org.uk/Events.Website/ClientApps/Silverbear.Web.EDMS/public/default.aspx?tabid=37&id=138&guid=e40bef2b-d47f-4012-8319-0b36db96e0fc

More information about Professor Martin Parker can be found at: http://www2.le.ac.uk/departments/management/people/mparker


Share this page:

Older press releases

For press releases issued before 4 October 2010, please visit the old eBulletin site.

Get in touch

T: +44 (0)116 252 2160
E: press@le.ac.uk

The Press Office is open 9.00am-5.00pm, Monday to Friday.

For general enquiries about the University, contact the main switchboard on +44 (0)116 252 2522.