The existence of mutual financial institutions has been partly explained also by the protective regulation, which at least prevented stock companies from competing against mutuals in particular markets (O’Hara 1981). At present, deposits can easily be transferred to an alternative financial institution which poses a problem certainly for mutual banks as deposits are their main source of funding. However, as Amess (2002) points out, mutuals make their customers members, generating a perception of being part of the organization and thus increasing member inertia. Fonteyne (2007) states that mutual banks’ customer&members can be expected to be more loyal than customers of commercial banks, and the mutuals typically have strong retail market positions, especially in their target market segment. .
