BIS central bankers’ speeches  5  The recession has brought to light the weaknesses of the mutual banks’ business model: rigid costs, reliance on income from traditional intermediation, loan concentration. Even the growth strategies pursued in the past that allowed them to greatly expand the areas and customer segments served16 have been shown in recent years to amplify risk.
The size and the quality of mutual banks’ capital are still fairly high. However, the decline in profitability reduces their self-financing, virtually the only channel by which mutual banks can increase their own funds. The gap with respect to the largest banks, a competitive advantage that the mutual banks have long enjoyed, is gradually narrowing.