This paper analyzes how French cooperative banking groups adapted their organization, status and business model to develop and grow, up to the current financial crisis. It explores how they benefitted from evolutions in cooperative law that lowered financing constraints and increased the scope of their activities, thus becoming large banking groups, and identifies how these groups tried to develop a model of governance, characterized by internal control, which was partly dedicated to the members, but biased more and more towards the top of the organizational pyramid and to stockholders (the new stakeholders coming from the existence of listed vehicles). We also highlight how cooperative banks resisted potential threats in proposed new international regulatory and accounting rules, often through a lobbying network. While the developing business model for cooperative banks appeared to confer a comparative advantage and was synonymous with efficiency before the financial crisis, it seems now that the hybridization of the cooperative model has been a source of conflicts of interest, of a weakness in strategy and an incentive to increase risk. This paper aims to examine how and why these comparative advantages have become a burden, and whether all French cooperative banking groups have suffered from the crisis in a similar way, or whether different organizational and strategic features or choices may explain different levels of resilience to financial turmoil.
