Labor Bank

Labor Bank

 

(trade union bank), in capitalist countries, a bank whose capital belongs to trade unions and cooperative societies. The first labor banks were established in the 1920’s to protect trade union capital against devaluation and give credit support to workers’ organizations. During the world economic crisis of 1929–33 many labor banks went bankrupt. After World War II labor banks were reopened in some countries.

During the 1960’s and early 1970’s, labor banks developed to the greatest extent in the Federal Republic of Germany (FRG) and in Austria. The Bank für Gemeinwirtschaft (Collective Economy Bank), which operates in the FRG, was formed after six labor banks merged in late 1958 and were joined in 1964 by the Bank für Wirtschaft und Arbeit (Bank for Economy and Labor) in West Berlin. The Council of Trade Unions owns 75 percent of the stock, with the Council of Consumer Cooperative Societies owning the remaining 25 percent. The bank was ninth in the country in terms of assets in 1973. It performs all the operations of a commercial bank and participates in the capital of roughly 30 banks in the country and abroad. The Austrian labor bank, the Bank für Arbeit und Wirtschaft (Bank for Labor and Economy), was third in the country in terms of assets in 1973; its stockholders are the Federation of Trade Unions and the consumer cooperative system.

Present-day labor banks have become general-purpose banks; the trade union capital mobilized through these banks is used in large part to grant credit for capitalist enterprises.

E. D. Zolotarenko

References in periodicals archive ?
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