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date: 17 October 2019

Abstract and Keywords

There is merit in having a diversity of ownership structures in a financial sector and mutuals and similar ownership models have a substantial contribution to make to diversity. The chapter considers the arguments in the UK in favour of conversion of mutuals to shareholder value institutions and reviews the outcomes. They are shown to have been largely bogus and have been found to be irrelevant. Members of converting institutions voted for conversion because the ‘windfalls’ implied an inter-generation transfer of wealth from previous and potentially future members to the current cohort. Comparison is made between the UK and other European countries with regard to conversions: in most other European countries such conversions are impossible because residual net worth is regarded as being held in perpetuity within the institution rather than a saleable asset owned by the current cohort of members.

Keywords: mutuals, diverse ownership structures, windfalls, inter-generation wealth transfers, shareholder value institutions

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