On 21 December 1899, the first Swiss Raiffeisenkasse (bank) was established in the denominationally neutral school building in the Swiss village Balterswil by the circle of the Catholic men’s association Bichelsee, the “Pius Association” around Father Johann Evangelist Traber, which started operations in Bichelsee on 1 January 1900. The foundation should have a solid economic foundation and counteract “harmful pleasure” and “vanity”.
After some successful years of the first Swiss Raiffeisenkasse, Father Traber wrote about the purpose of this non-profit cooperative bank: “Raiffeisen’s loan associations are an effective and infallible means to put the middle class back on its own feet vis-à-vis big business. They are the seed of freedom and the flourishing of the middle class, one of the most beautiful and blessed inventions of our century.”
“Raiffeisenkassen have developed rapidly in Switzerland as in other countries. Agriculture and small and medium-sized businesses have benefited enormously from the Raiffeisen movement, especially in rural areas. The cooperative idea that what is not possible for the individual can be achieved by united forces has proven its worth all over the world.”
As in Germany, Austria and other countries before, Raiffeisenkassen flourished in Switzerland, so that on the death of Traber on 29 October 1930, there were already 516 Raiffeisenkassen with 45,278 members in Switzerland. While the first 40 cooperative members of Bichelsee started with working capital of CHF 40,000, the 516 cash registers of 1930 already had assets of CHF 133.6 million invested with them and had an annual turnover of CHF 611 million. And that only one year after the global economic crisis, which also shook Switzerland.
Raiffeisen had already recognised the need for a central association of Raiffeisen banks in order to become as independent as possible from external capital. For this purpose, he founded the “Landwirtschaftliche Zentral-Darlehnskasse” in Neuwied on 30 September 1876. In order to ensure that the members of the Supervisory Board of the Zentral-Darlehnskasse do not work selfishly but conscientiously and in the public interest, Raiffeisen stated: “They are almost exclusively heads of local associations, enjoy no advantages whatsoever from the latter or from the “Zentral-Darlehnskasse”, but are liable with all their assets and work free of charge”. The agriculturally active, regional population should benefit from the business of the Raiffeisenkassen. Raiffeisen rejected all speculative transactions or stock trading and usury as well as pleasure and useless expenditures: “The rural population does not want to know anything about securities, even if they are the safest government bonds. [...] Once the investment of money in such papers had been introduced in the countryside, it would be difficult, even impossible, to keep to the limit. It would easily lead to the introduction of dizzy papers, which could cause unpredictable damage.”
Contrary to what seems to be customary in the umbrella organisation Raiffeisen Switzerland today, according to Raiffeisen the “Zentral-Darlehnskasse” should not pursue a quest for profit. It should only serve to preserve the individual Raiffeisen cooperatives. “The ‘Zentral-Darlehnskasse’ is not a bank in the usual sense of the word, but an equalisation body between the participating associations. For the associations which have surplus money, the latter serves as a place of storage, for those which lack money, as an auxiliary source”.
As early as 1901, Father Traber in Bichelsee also thought about the foundation of a Raiffeisen Association. It had to function as an auditing and central cash register association. As an auditing association, it has the task of carrying out a periodic audit of the association’s cash registers, “to protect them from abuse and slackening, to ensure that efficient Raiffeisen men are trained at all and to effectively promote the spread of the Raiffeisenkassen”. As the central fund association, he will establish a central fund, in which the individual associations can participate; in order to serve small and medium-sized businesses, this fund is to provide for cash compensation among the individual funds under favourable conditions. After about two dozen Raiffeisenkassen had been founded in Switzerland, the founding meeting of the Association of Swiss Raiffeisenkassen took place on 25 September 1902 at the Hotel Linth-
Escher in Zurich. Under the chairmanship of Father Traber, 10 Raiffeisenkassen participated from the very beginning. It was decided that the Central Fund Association should be a cooperative in which the individual Raiffeisen funds should become members. Bichelsee became the first seat of the new association under the chairmanship of Father Traber.
Raiffeisenkassen have developed rapidly in Switzerland as in other countries. Agriculture and small and medium-sized businesses have benefited enormously from the Raiffeisen movement, especially in rural areas. The cooperative idea that what is not possible for the individual can be achieved by united forces has proven its worth all over the world. The museum director at the Raiffeisen Museum in Raiffeisen’s birthplace in Hamm an der Sieg told us about a Japanese man who recently knelt down on the stairs to the birthplace and said: “This man has alleviated our misery in Japan.”
During the 2008 economic crisis, many people took their money out of the major commercial banks and brought it to Raiffeisenbank. They trusted that the cooperative banks are not familiar with speculative transactions and that they are regionally anchored. Raiffeisen had demanded as “the first and most important principle” that a cooperative district should be as small and demarcated as possible, i.e. “as a rule only extend to a civil or parish community with an average of 1,500 souls.” According to the reports in Insight Paradeplatz and the daily press, bona fide members of the cooperative have now found that the frontline under Pierin Vincenz in Raiffeisen Switzerland cooperative association have moved enormously away from Raiffeisen’s principles. Not only the hasty purchase of the investment bank Notenstein for CHF 600 million, the investment in the derivatives house Leonteq and the deal of the so-called investment vehicle Investnet, which has since been investigated by the public prosecutor, break with Raiffeisen’s principles. The general rise in wages at the head office in St Gallen of 50 per cent since 2000 and last year’s 43.5 per cent increase in wages of the Board of Directors of Raiffeisen Switzerland are no longer understandable both for the employees of the local cooperatives and for the owners of Raiffeisenbank, the members of the cooperative themselves.
In the NZZ am Sonntag, Felix Walker, the predecessor of Pierin Vincenz, demands that confidence in the cooperative bank Raiffeisenbank be restored, which speaks from the heart of many cooperative members: “Raiffeisen’s purpose is joint self-help. This cooperative principle must serve the members and not the management bodies.” Raiffeisen must again distinguish itself more strongly from profit-driven banks. Felix Walker demands more power for the cooperative. A return to the principles and values of Raiffeisen and Traber is due.
The cooperative members of Raiffeisenbank Wängi-Matzingen showed on 20 April 2018 that this is possible. After a long and impressive debate at this year’s Annual General Meeting, 598 out of 777 cooperative members present refused to give in to pressure from Raiffeisen Switzerland. They burst the planned merger of the two Thurgau Raiffeisen banks Matzingen-Wängi and Münchwilen-Tobel. They did not want Raiffeisenbank to become an increasingly impersonal commercial bank, and again demanded more influence of the actual owners. In contrast to the advisors of Raiffeisen Switzerland, they did not see any advantage in further centralisation through an even larger cooperative, but rather a loss of regional roots, personal proximity and co-determination. •
(Translation Current Concerns)
gk. Wängi. After the headlines around former Raiffeisen boss Pierin Vincenz, it is now rumbling at the base. It is very rare that the Raiffeisen cooperative members refuse to give their administrative council their allegiance. On 20 April 2018, the co-owners of Raiffeisenbank Wängi-Matzingen clearly rejected the merger with Raiffeisenbank Münchwilen-Tobel at this year’s General Assembly. Contrary to expectations, 598 of 799 cooperatives present rejected the merger. In numerous statements from the general meeting, which lasted from 7 to half past 11 pm, the speakers did not allow themselves to be deluded by the well-sounding statements of the administrative council. From the position of strength, they wanted to shape the future and develop the future Raiffeisenbank Münchwilen-Wängi a contemporary bank and better advise customers for the cooperative members.
However, the voters held against these promises that they consider their Raiffeisenbank financially sound – also considering the current balance sheet – and that they are very satisfied with the current advice. They recall that the cooperative’s most important purpose is “joint self-help” and the “dissemination and deepening of the cooperative ideas of Friedrich Wilhelm Raiffeisen”. In his ideas nothing was mentioned like hunting for record profits. “So we stick to our trade like the cobbler and keep our village bank in a manageable size.” They do not see any advantage in the doubling of the number of cooperative members to 9600, but a reduction of co-determination as co-owner of the bank. With the further centralisation of the Raiffeisenbank, they fear that they will become an impersonal number for the management. They do not accept the dismantling of co-determination in a General Assembly if it only degenerates into a “social event” with a fine meal. Such a size and centralisation is not compatible with the views of Friedrich Wilhelm Raiffeisen. The control of the board of directors and the bank management by the co-owners of the bank could then even worse be ensured. Further centralisation of Raiffeisenbank would offer even more opportunities to direct the Raiffeisenbank top down. In addition, the president had to confirm that with a very good balance sheet of 620 million CHF, a merger was not necessary for legal or financial reasons. It was also reminded that the personal familiarity between the bank management and the members of the cooperative as well as the regional roots and down-to-earthness in the economic crisis in 2008 caused many people to withdraw their money from the commercial banks and to move it to Raiffeisenbank. The machinations of former CEO Pierin Vincenz, which are deeply contradictory to Friedrich Wilhelm Raiffeisen’s ideas of solidarity, led the cooperative members to repeatedly ask questions about cooperative supervision over the Raiffeisen Switzerland association.
The massive refusal result was also triggered by the fact that in the perfectly developed merger planning hereafter, not a proven and ethically convinced “Raiffeisengenosse” should exercise the presidency, but an unknown banker with 20 years of professional experience at the commercial bank UBS.
The bank management and the president of the board of directors were clearly surprised by the powerful No of the members. Apparently, they and their advisors from Raiffeisen Switzerland believed in the wisdom of textbooks on the merger management of Raiffeisen banks. There, the “exercise of ownership rights” is seen as the most irrelevant “member-value-component” for the members of the cooperative. Accordingly, the ownership rights are therefore not important to the members of the cooperative. In the opinion of such managers, the only thing important to the members of the cooperative is the use of services such as free admissions to museums or a fine dinner, as well as the interest on their shares. In the Raiffeisenbanks, for example, according to the author Vanessa Arts, “customer interests” dominate before “owner interests”. The General Assembly in Wängi proved that this is a mistake. In addition, the promise that no branches will be closed was questioned in the Wängener General Assembly. Quite rightly, when you consult Venessa Arts: “Branch closures should therefore not be part of a merger, according to almost half of the experts. They should be postponed on the temporal level as long as possible.”
The evening ended with the performances of an Appenzell musician, who commented impressively spontaneous on the course of the General Assembly in his unconventional songs. His last song was “Don’t worry – be happy ...”. Even better would have been: “Don’t worry – be Wängi ...”
(Translation Current Concerns)
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