In the last few months I have stumbled across the following quotes hidden deep in policy, economic and academic papers:

  • HM Treasury (at the tail end of the previous Government): “Building societies have a natural advantage to banks in being able to return a greater share of profits to their Core Tier 1 capital base than banks (as they have no implicit commercial responsibility to maximise dividends to shareholders)”

  • The Bank of England: “If FMIs are operated only in the private interests of their managers, owners, or even their members, they may under-invest in the mitigation of risks to the wider system. The Bank’s role as supervisor is to ensure that the infrastructures are managed in a manner that is consistent with the public interest including reducing systemic risk.

  • The Oxford Finance Group (a financial service consultancy) in a report sponsored by Deutsche Börse, BNP Paribas and others:  “A for-profit market infrastructure institution with a dominant position may exploit its market power to benefit its shareholders at the expense of its users… The cooperative and nonprofit models may, however, have an important advantage over the other governance models in this context. “

While these are selective quotes, it seems the financial regulators think just-for-profits are a threat to the system and the public interest, while the Treasury has suggested not-for-profits have a commercial advantage, and finance folk think markets work better for customers if not-for-profits are in charge.
We have a lot to learn from the people running our financial services.