The governor of the Bank of Italy, Ignazio Visco, doesn’t miss an opportunity to call for Italy’s co-operative banks to transform themselves into proper limited companies and abandon their traditional statute of one head one vote. There are 37 co-operative banks in Italy all with the same governance model which represent a major component of the country banking system: 18 of them are the pivot of multi-brand banking groupings and 7 are listed in the stock exchange with a cumulative capitalization of 12 billion euros, or one sixth of all listed banks. As of June 2012 their cumulative assets were equal to one fifth of the entire banking system. The regulator thus believes that such an important slice of the Italian lending system has to be equipped with a governance model consistent with the one of their bigger pairs, that of a limited company where shares, not heads, are entitled with voting rights. More and more often, indeed, co-operative banks have become the head of complex banking groupings, where the co-operative bank has the control of several limited banking companies and cashes in the dividends from them. They are therefore pursuing profit rather than co-operative and mutual goals, the regulator reasoning goes, and thus they must have a for-profit governance system. Also because, under the current system, could be easy for a small group of owning members who do not represent a relevant part of the equity capital to gain the control of a co-operative bank, and of their subsidiaries. In such a way, it is the worry of the Bank of Italy, the correlation between governance and capital of risk gets lost. But co-operative banks owner members and managers think differently and even when the top management, as was the case at Banca Popolare di Milano, one of Italy’s largest co-operative banks, tries to introduce some hybrid form of limited company statute their efforts clashes against the wall of the general meeting, where the new rules of governance have to be adopted following the old ones. But it’s not just about power and seats in the boardrooms. Some observers and experts believe that by turning themselves into proper limited companies Italy’s co-operative banks could become targets of hostile takeovers by bigger lenders, maybe from abroad, and thus lose their identity of “lender of choice” of the local community made of small businesses and householders. And even the IMF seemed to share some of those concerns as it wrote in its latest report on Italy that efforts to improve and modernize the Italian banking system are not necessarily to the advantage of the financial stability or of the real economy as they often result into the benefit and the profit of certain investors.