Determinants of Transactional Internet Banking

The decision of credit unions in the United States to adopt transactional web-based services is consistent with profit-maximization behavior. Credit unions adopt transactional internet banking services when they provide a higher proportion of consumer loans and when there is increased competition from other financial institutions. They adopt transactional internet banking to attract new customers. The larger the credit union the higher the probability of adoption of transactional internet banking. The probability of adoption of transactional banking is directly related to credit unions’ efficiency and indirectly related to loan delinquencies. We also find that the probability of credit unions offering transactional internet banking is positively related to the percentage of the young population in the counties where credit unions are located.     

Financial and economic performance of major Brazilian credit cooperatives

The credit union's main functions are the provision of individual financial loans based on collective savings, reaching up to provide full banking services, with expansion of its social function. Cooperatives are an alternative to supply a credit demand in the market, because a third of the municipalities have no bank branches. Although the participation of cooperatives in credit operations is still small compared to the Brazilian national banking system, its continued growth demonstrates the importance of this sector. In this sense, the analysis of the performance of these cooperatives becomes relevant to the extent that incentives to industry expansion differ from other financial institutions. In this context, this study aimed to analyze which the financial and economic performance of Brazil's largest credit unions. This performance analysis was performed using the indicators proposed by the CAMEL model, then the data envelopment analysis (DEA). It can be seen that there is a positive relationship between the use of variables in the model and the measurement of financial performance of credit unions. Moreover, according to the results, it can be observed that Uniprime Northern Paraná, Sicoob Cocred and Sicredi North RS/SC were cooperatives that stood out as efficient.     

The growth of US credit unions

The growth of US credit unions during the 1990s is investigated empirically, using univariate and multivariate cross sectional and panel estimation techniques. Univariate tests of the law of proportionate effect suggest that in general large credit unions grew faster than their smaller counterparts. On average credit unions with above-average growth in one period tended to experience below-average growth in the next. Smaller credit unions tended to have more variable growth than large ones. While credit unions share a common co-operative philosophy, they differ in terms of age profile, scope for membership growth, charter type and financial structure and performance. In estimations of a multivariate growth model, most of these characteristics are found to have a significant influence on the size-growth relationship. While large state chartered credit unions grew faster than their smaller counterparts, the reverse was true for federally chartered credit unions. In general, if larger credit unions grew faster than smaller ones, they tended to do so for specific reasons: because their charters were less restrictive, because they were more efficient, or because they had a financial structure that was more conducive to growth. Therefore credit union growth was not ‘random', but highly systematic.     

Capital management in mutual financial institutions

Capital management by mutual financial institutions (such as credit unions) provides a valuable testing ground for assessing the impact of capital regulation and theories of managerial behaviour in financial institutions. Limited access to external equity capital means that capital accumulation must be met primarily by reliance on retained earnings. To deal with shocks to the capital position and avoid breaching regulatory requirements, managers will aim to have a buffer of capital in excess of the regulatory minimum. Moreover, mutual governance arrangements and an absence of capital market discipline mean that managers have discretion to set target capital ratios which differ significantly from industry averages. This paper develops a formal model of capital management and risk management in mutual financial institutions such as credit unions which reflects these industry characteristics. The model is tested using data from larger credit unions in Australia, which have been subject to the Basel Accord Risk Weighted Capital Requirements since 1993. The data supports the hypothesis that credit unions manage their capital position by setting a short term target profit rate (return on assets) which is positively related to asset growth and which is aimed at gradually removing discrepancies between the actual and desired capital ratio. Desired capital ratios vary significantly across credit unions. There is little evidence of short run adjustments to the risk of the asset portfolio to achieve a desired capital position.     

以创新带动传统信贷业务市场拓展

本文通过分析当前国内金融市场现状并借鉴国外金融市场发展经验,认为银行传统信贷业务仍然具有良好的发展前景,在未来一定时期内仍将是企业融资的主渠道,是银行开展其他金融服务的基础和平台,并且结构将适应经济结构变化不断优化.针对近年来银行传统信贷发展面临的资本约束、金融脱媒和利率市场化等冲击,提出了以创新手段带动银行传统信贷业务和市场拓展的观点,即以理念创新重新定位传统信贷业务市场,以价格创新应对资本约束和利率市场化,以科技创新优化传统信贷发展模式,以产品创新和流程创新解决传统信贷难点,以营销创新推动信贷市场拓展,以手段创新加强信贷风险管理.     

以创新带动传统信贷业务市场拓展

本文通过分析当前国内金融市场现状并借鉴国外金融市场发展经验，认为银行传统信贷业务仍然具有良好的发展前景，在未来一定时期内仍将是企业融资的主渠道，是银行开展其他金融服务的基础和平台，并且结构将适应经济结构变化不断优化。针对近年来银行传统信贷发展面临的资本约束、金融脱媒和利率市场化等冲击，提出了以创新手段带动银行传统信贷业务和市场拓展的观点，即以理念创新重新定位传统信贷业务市场，以价格创新应对资本约束和利率市场化，以科技创新优化传统信贷发展模式，以产品创新和流程创新解决传统信贷难点，以营销创新推动信贷市场拓展，以手段创新加强信贷风险管理。     

Do some lenders have information advantages? Evidence from Japanese credit market data

Using detailed Japanese credit data, we test for the existence of a credit market hierarchy. Empirical tests indicate that firms with information problems are more likely to carry higher proportions of relationship loans from main banks than non-main banks, holding constant risk and control factors. We further examine credit specialization on the part of lenders by testing the relationship between client firms' information and risk characteristics and the concentration of loans obtained from depository institutions versus other financial institutions. However, no significant differences in information superiority between these two types of financial institutions are found. We conclude that our evidence supports the credit market hierarchy hypothesis for Japanese main banks in particular but not depository institutions in general.     

Financial services consumption constraints: Empirical evidence from Rwandan rural households

The concentration of banking and financial institutions in the city and/or urban in any developing countries in general, Rwanda in particular creates various constraints in availing and consuming different financial products and services by the rural households. The article examines the forms and determinants of credit constraint status of rural households of Rwanda and the impact of constraints variables on availing and using the range of financial products and services. The study concludes that 42.5 per cent of the Rwandan rural households surveyed face triple forms of credit constraints including self-imposed constraints, quantity rationing and risk rationing by formal financial institutions. However, quantity rationing is perhaps not as pervasive as self-imposed rationing and risk rationing by the lenders. The results from the empirically tested model revealed that in addition to demographic and socioeconomic characteristics of households, the variables constraining demand and/or supply of financial services with reference to accessibility were significant predictors of households' credit constraints. The study informs on the needs for innovative systems, products and services that would increase access relax credit constraints and improve rural consumers' welfare. The authors conclude that establishing an enabling legal and regulatory environment, providing adequate public goods and physical infrastructure, designing capacity building and technical assistance programs and maintaining political and macroeconomic stability are perhaps major public and policy issues needed for a robust rural financial market.     

Switching customers from branches to internet: A credit union's journey

This research paper reports how a credit union applied knowledge from the literature to solve a marketing problem. A credit union serves a unique group of customers who may be in the same profession, have the same employer, or simply in the same regional location. The marketing problem is how to switch bank customers from branches to internet for the main reason of reducing transaction costs. The research model comprises the independent factors of customer, transaction, application, and bank; and the dependent variables the number of internet banking transaction, perceived usefulness of internet banking, and willingness to use internet banking measuring different aspects of internet banking. We carried out an on-site survey in different branches of our subject credit union to capture the opinion of customers who rely solely on branches for banking transactions. To our knowledge, this study provides a pioneer internet banking survey in the context of credit unions. The survey results reveal different internet banking facilitators for customers with and without internet bank accounts. For customers with internet bank accounts, application security is the most important facilitator variable for them to continue its use in the future; while promises for continuous improvement can be a prohibitive variable. In order to encourage customers without internet bank accounts to adopt internet banking, the management should focus on strengthening the variables of bank diversified service, bank responsiveness, bank image, and extra online instruction and feedback for complicate internet transactions; and reducing the negative effect of web fun/entertainment. We also found that the variables of proficiency in using computers, application security, and bank image have opposite effects on customers with and without internet bank accounts.     

Credit Risk in Two Institutional Regimes: Spanish Commercial and Savings Banks

Although credit risk is an important factor that financial institutions must cope with, the determinants of bank problem loans have been little studied. Using panel data, we compare the determinants of problem loans of Spanish commercial and savings banks in the period 1985–1997, taking into account both macroeconomic and individual bank level variables. The GDP growth rate, firms, and family indebtedness, rapid past credit or branch expansion, inefficiency, portfolio composition, size, net interest margin, capital ratio, and market power are variables that explain credit risk. However, there are significant differences between commercial and savings banks, which confirm the relevance of the institutional form in the management of credit risk. Our findings raise important bank supervisory policy issues: the use of bank level variables as early warning indicators, the advantages of bank mergers from different regions, and the role of banking competition and ownership in determining credit risk.     

Banking crises,financial dependence,and growth

This paper contributes to the literature that analyzes the mechanisms linking financial shocks and real activity. In particular, we investigate the growth impact of banking crises on industries with different levels of dependence on external finance. If banks are the key institutions allowing credit constraints to be relaxed, then a sudden loss of these intermediaries in a system in which such intermediaries are important should have a disproportionately contractionary impact on the sectors that flourished due to their reliance on banks. Using data from 38 developed and developing countries that experienced financial crises during the last quarter century, we find that those sectors that are highly dependent on external finance tend to experience a substantially greater contraction of value added during a banking crisis in countries with deeper financial systems than in countries with shallower financial systems. Our results do not suggest, however, that on net the externally dependent firms fare worse in deep financial systems.     

Economies of Scale and Economies of Scope in Multiproduct Financial Institutions: A Study of British Columbia Credit Unions

This paper investigates the production technology facing computerized credit unions in Canada. A full system of translog cost equations is estimated in order to test for economies of scale, economies of scope, and other production characteristics in a multiproduct context. The regression results indicate that most of the credit unions in our sample experience significant increasing returns to scale as they expand their level of output. There is also evidence of cost complementarity or economies of scope in their mortgage and other lending activities. As a result, legislation which limits the ability of credit unions to grow and diversify will likely raise the operating costs of this important group of financial institutions. Additional structural tests of the most general translog specification suggest that none of the restrictive production conditions commonly imposed by other researchers using Cobb-Douglas and CES specifications provide a valid representation of credit union technology. The results of many earlier studies are therefore open to question.     

Malmquist indices of productivity change in Australian financial services

In this study the nature and extent of efficiency and productivity growth in deposit-taking institutions is investigated using nonparametric frontier techniques. Employing Malmquist indices, productivity growth is decomposed into technical efficiency change and technological change for two hundred and sixty-nine Australian credit unions. The results indicate that most credit unions experienced technological progress after deregulation, and that any efficiency gain found was largely the result of improvements in technical efficiency rather than scale efficiency. That productivity growth which did occur due to an increase in efficiency over the period tended to be in credit unions with a small number of members and a large asset base, whilst technical progress was most pronounced in institutions with a relatively high proportion of residential and commercial loans.     

Macroprudential policies,capital flows,and the structure of the banking sector

Using a large sample of advanced and emerging market economies over the period 1999–2012, we examine the effectiveness of macroprudential policies (MPPs) in managing cross-border bank flows. Conditioning on the structure of the banking sector in the MPP-implementing country, we find that higher regulatory quality and a higher credit-to-deposit ratio increase the effectiveness of MPPs, while a higher cost-to-income ratio has the opposite effect. If all three financial variables are evaluated at the median, the marginal effect of our preferred MPP measure leads to a reduction of international bank inflows in percent of GDP by around half a percentage point and is only marginally significant. However, when the more enhanced 25th (10th) percentiles of their respective distributions are considered, we observe, as a response to the same MPP measure, a reduction of bank inflows by 3.44 (5.39) percentage points that is highly statistically and economically significant. Additionally, we find that the structure of the domestic banking sector determines spillovers from MPPs across asset classes, while spillovers from MPPs across countries are a function of banking sector conditions both at home and abroad.     

Credit unions vs. commercial banks,who takes more risk?

A unique feature of the financial services industry is that both shareholder-owned banks and member-owned credit unions coexist and compete against each other. In this study, we investigate two research questions. First, we compare risk-taking by banks and credit unions, with an additional consideration as to how regulatory oversight (state or federal) relates to such risk-taking. Second, we examine how competition affects the difference in risk-taking between these two types of financial institutions. To answer both questions, we rely on a matched sample (by loan type, size, and county) of commercial banks and credit unions, covering the period between 2010 and 2017. We use three empirical proxies for risk-taking, the Z-score, measuring an institution’s insolvency risk, as well as the ratios of non-performing loans to total loans and loan charge-offs to total loans, measuring the credit risk. Our results suggest that banks tend to engage in more risk-taking than credit unions; however, state regulatory oversight reduces the risk-taking gap, especially in terms of the Z-score. We further find that competition induces different risk-taking behaviors in banks and credit unions. Our results are robust to several alternative specifications.     

The size and growth of microfinance institutions

We investigate the relationship between size (measured by total assets and number of active borrowers) and growth for a worldwide sample of microfinance institutions with different ownership forms (micro-banks, NGOs, cooperatives/credit unions and non-bank financial institutions) and commercial orientation (profit and not-for-profit) drawn from 120 countries over the period 2000 to 2014. Using a dynamic panel data model, we find little evidence that size confers growth advantages to microfinance institutions. We find some evidence that growth rates for credit unions and microfinance institutions with a not-for-profit commercial orientation present negative persistence. The variability of growth rates differs across the size distribution of microfinance institutions, and this result is consistent across commercial orientation and ownership form. Other factors affecting the growth of microfinance institutions include age (new microfinance institutions grow faster than young and mature counterparts), levels of bad debt, efficiency and regulation.     

Credit Unions in Britain: A Time for Change

As member-owned, not-for-profit financial institutions, credit unions are an important instrument of public policy, particularly in pushing forward measures to tackle financial and social exclusion. Historically, the credit union movement in Great Britain has been hampered by a number of factors, including a lack of leadership, a cohesive identity and regulatory impediments. Recent legislative review and change has provided credit unions with the opportunity to grow and extend the scale and scope of services they can offer to their members. However, policy-makers should be aware that funding initiatives to support credit union development might undermine their self-help cornerstone and weaken the future development of the movement.     

Credit Unions in Britain: A Time for Change

As member-owned, not-for-profit financial institutions, credit unions are an important instrument of public policy, particularly in pushing forward measures to tackle financial and social exclusion. Historically, the credit union movement in Great Britain has been hampered by a number of factors, including a lack of leadership, a cohesive identity and regulatory impediments. Recent legislative review and change has provided credit unions with the opportunity to grow and extend the scale and scope of services they can offer to their members. However, policy-makers should be aware that funding initiatives to support credit union development might undermine their self-help cornerstone and weaken the future development of the movement.     

Credit unions and earnings management to mitigate political scrutiny over tax-exempt status

In this paper, we examine whether credit unions manage earnings to mitigate political scrutiny. In particular, we study whether credit unions increased loan loss provisions to decrease earnings around a 2005 congressional hearing on the efficacy of credit unions’ tax-exempt status. On average, we find evidence consistent with credit unions managing earnings downward via the loan loss provision in the quarters leading up to and surrounding the congressional hearing. In addition, we find that credit unions with higher earnings before the loan loss provision engaged in more downward earnings management than credit unions with lower earnings before provision. Our findings contribute to the literature examining the use of downward earnings management to avoid political scrutiny and the banking literature. Likewise, our results inform the continued debate as to whether credit unions should be tax-exempt.     

中国银行业竞争与非金融企业影子银行化

本文结合非金融企业影子银行化的形成机制以及中国金融市场发展的特征事实,从“供给侧”和“需求侧”双重视角探究银行竞争如何抑制非金融企业影子银行化。以2003—2019年中国非金融上市企业为研究样本,分析发现,银行竞争能够显著降低非金融企业影子银行化。进一步以放松中小商业银行分支机构市场准入为标志事件构造准自然实验,基于双重差分法的计量结果为识别银行竞争对非金融企业影子银行化的抑制效应提供了稳健的经验证据。机制分析发现,银行业竞争通过弱化“信贷扭曲”和“监管套利”两个维度的作用机制抑制非金融企业影子银行化。异质性分析表明,银行竞争对非金融企业影子银行化的抑制作用在融资约束较高和投资机会较少的样本中尤为明显。