Laboral flies the co-op flag

Eric Ellis
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Caja Laboral Kutxa doesn’t pay sky-high salaries, nor does it want to join the slick commercial banks and turn its worker-led structure upside down. Such social motivation has enabled it to weather the storms that have crossed Spain’s economy, but it hasn’t all been plain sailing

Jon Emaldi Abasolo surveys the remains of Spain’s devastated banking landscape and scratches his head. He’s genuinely confused.

"We know how we manage our bank," says Abasolo, a director of the Basque savings bank Caja Laboral Kutxa, part of the Mondragon group of co-operative businesses (MCC), "and we know that it is managed properly. And we ask ourselves if it could be any better managed than it is if we paid ourselves 10 times more?"

He answers his own question: "I don’t think so."

It’s a question that may well be asked of the British enterprise regarded by many as the grandfather of co-operative banking.

Once seen as a global model for community banking and business, the Manchester-based Co-op has become a byword for notoriety, capped last month by losses of £2.5 billion ($4.2 billion), mostly accumulated at the Co-op Bank, revealed by its parent,...