Most if not all big investment banks are now corporations, usually listed on the stock exchange. It wasn't always this way.
Prior to the 1970s investment banks couldn't be listed on the NYSE. Goldman Sachs (etc) weren't corporations. They were partnerships, basically like a law firm. This is a key difference because a partnership has unlimited liability. This tends to make such organizations very conservative with risk management, for obvious reasons.
But when this changed, all these partnerships incorporated instead and listed on the stock exchange. Incorporation shields the leaddership from the downside of their bad decisions. As we've seen, the governmen thas stepped in to assume that risk for really no good reason at all ("too big to fail").
Interestingly, I'm not sure there's a legal barrier preventing law firms from listing on the stock exchange but they don't, which is interesting.
So in your case these mutual societies and community banks existed for the benefit of their members and they (including the members) took the (one time) bag and was shielded from accountability. I see investment banks as falling into this same trap.
For law firms, there is a barrier (in the United States, at least): law firms must be owned by lawyers. Other common law jurisdictions, such as Australia, have eliminated this requirement and have publicly traded law firms. I assume soon, you’ll start seeing what’s happening here with medical and other professional service practices that have similar ownership restrictions where ownership, services and revenues are theoretically decoupled through creative contracting arrangements, but I don’t know of that having happened yet with a law firm.
Most law firms in the United States are now organized as LLPs (a limited liability partnership, which segregates liability among the partners), but notably the most profitable law firm measured in a per capita basis, Wachtell, is still organized as a general partnership with unlimited partner liability. They deliver their clients one-line invoices, containing numbers with many, many more zeroes, for “services rendered.”
Prior to the 1970s investment banks couldn't be listed on the NYSE. Goldman Sachs (etc) weren't corporations. They were partnerships, basically like a law firm. This is a key difference because a partnership has unlimited liability. This tends to make such organizations very conservative with risk management, for obvious reasons.
But when this changed, all these partnerships incorporated instead and listed on the stock exchange. Incorporation shields the leaddership from the downside of their bad decisions. As we've seen, the governmen thas stepped in to assume that risk for really no good reason at all ("too big to fail").
Interestingly, I'm not sure there's a legal barrier preventing law firms from listing on the stock exchange but they don't, which is interesting.
So in your case these mutual societies and community banks existed for the benefit of their members and they (including the members) took the (one time) bag and was shielded from accountability. I see investment banks as falling into this same trap.