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Using a large panel of over 300 banks for 15 years from 19 countries, we study the impact of ownership structure on performance in European banking. The specific measures we use are profitability, loan losses and cost efficiency. Our specific contribution is to use finer classifications in ownership structures than previous literature on ownership and performance has used. The results are contrary to the widely held belief that shareholder ownership is superior to stakeholder ownership in banking. There are no significant differences in profitability across ownership classes. Cooperatives and publicly owned savings banks outperform commercial retail banks in terms of cost efficiency and loan losses. There is some heterogeneity within the stakeholder-owned banks.

The Great Crisis that started in 2007 deeply affected banks throughout Europe. Using the assessments of the two global agencies that publish ratings of the financial strength of individual banks, we study whether the crisis hit European banks differently depending on their organizational structure. We analyze the changes in the ratings during the crisis and how they are related to bank ownership. Our results lend support to the hypothesis that stakeholder banks, especially cooperative banks, were downgraded to a lesser degree than shareholder banks. However, the results differ somewhat across the rating agencies. We also discuss the sources of ratings disagreements in the paper. Our paper is among the first presenting statistically based evidence on the relative merits of different organizational structures during the recent financial and economic crisis.

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This paper investigates how past experience with banking crises influences an individual's trust in banks. We combine data on banking crises for the period 1970-2014 with individual data on trust in banks for 52 countries. We find that experiencing a banking crisis diminishes a person's trust in banks, and that high exposure to banking crises is negatively related to trust in banks. An individual's age at the time of the crisis is important, and significant for individuals between 41 and 60 years of age at the time of the banking crisis. Both severe and mild crises diminish trust in banks, but a severe banking crisis hits also young people's trust, while less severe banking crises mainly degrade trust of more mature people. The detrimental effect for trust in banks seems to be connected specifically to systemic banking crises. Other types of financial crises incur a less significant effect.Overall, our results indicate that banking crises generate previously unrecognized costs for the economy in the form of a lasting reduction of trust in banks. JEL codes: G21, O16.