Abstract
This paper presents a literature review on the regulatory framework of the Portuguese cooperative credit system and some historic data. The aim is to understand their role in the Portuguese banking industry and how the regulatory framework affects cooperative banking activity. The cooperative credit system in Portugal comprises only agricultural credit cooperatives (Caixas de Crédito Agrícola Mutuo—CCAM). Its present corporate format was created in 1911, but the genesis of Portuguese agricultural credit cooperatives dates back to the sixteenth century and can be regarded as a typical example of how public policy can influence the development of cooperative credit institutions. The Caixa Central de Crédito Agrícola Mutuo is the pivotal institution in the Crédito Agrícola Group, with a remit that is the mainstay of the group, namely the strategic global coordination, supervision and guidance of its associates. The CCAM’s strong customer deposit base and prudential credit management policy have proved to be crucial in confronting current hard times. Indeed Crédito Agrícola is the only one of the major Portuguese banks that has not experienced negative profits since the beginning of the present economic and financial crisis.
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Notes
- 1.
The abbreviation CCAM denotes both the singular ‘Caixa de Crédito Agrícola Mutuo’ and the plural ‘Caixas de Crédito Agrícola Mutuo’.
- 2.
The 1992–1993 Portuguese agricultural crisis together with the difficulty of CCAM in attracting new members resulted in the continuous degradation of CCAM results, which became negative from 1992 to 1995 (Cabo 2003).
- 3.
Approved by Decree of Law n° 24/91, with the following alterations and republished in the appendix to the Decree of Law n° 142/2009.
- 4.
To exemplify, if the Caixa Central does not favour the registration of a member of governance bodies, the Bank of Portugal rejects the registration.
- 5.
Decision-making in General Assembly of Members of individual CCAM obey to the principle of democracy. This is also true for decision-making in General Assembly of Members of Caixa Central, except for some specific decisions (election of the Caixa Central board of directors, budget approval and profits allocation) in which the voting rights can differ according to the shareholding and CCAM average deposits and the solvency ratio.
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Cabo, P., Rebelo, J. (2016). The Portuguese Cooperative Credit System. In: Karafolas, S. (eds) Credit Cooperative Institutions in European Countries. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-28784-3_10
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