Can Australian Credit Unions and Building Societies Compete with Commercial Banks? Expanding the Regulator’s Toolkit

2011 ◽  
Author(s):  
Necmi Avkiran ◽  
David W.L. Tripe
Keyword(s):  
Commercial Banks ◽  
Credit Unions ◽  
Building Societies

A comparison of bank and credit union growth around the financial crisis

2020 ◽  
Vol 35 (1) ◽  
pp. 25-44
Author(s):  
Wenling Lu ◽  
Judith Swisher
Keyword(s):  
Financial Crisis ◽  
Growth Rates ◽  
Commercial Banks ◽  
Credit Unions ◽  
Credit Union ◽  
Test Results ◽  
Net Charge ◽  
Content Type ◽  
Union Growth ◽  
Recent Financial Crisis

PurposeThe purpose of this research is to examine the growth rates of commercial banks and credit unions around the financial crisis and recovery. Credit unions are analyzed as a group and by field of membership. Specifically, this research analyzes the growth rates of assets, deposits, and loans.Design/methodology/approachThis research employs univariate tests of differences to examine the median growth rates for commercial banks and credit unions. Unbalanced pool regressions analyze growth rates during the pre-crisis, crisis, and recovery periods, controlling for size, net charge-offs, and unemployment.FindingsUnivariate test results that control for size show that banks grow at faster rates than credit unions for most of the pre-crisis years. However, medium sized credit unions grow at faster rates for most of the crisis and recovery years. Results of unbalanced pool regressions suggest that, overall, credit unions grow at slower rates than do banks. However, during the crisis and recovery, credit union growth is significantly greater than that of banks, after controlling for net charge-offs, size, and unemployment. Credit union growth varies by field of membership type.Originality/valueAlthough a large volume of research examines commercial bank performance around the financial crisis, only a few papers assess the performance of credit unions. And very few papers compare commercial banks and credit unions. This paper explores how the recent financial crisis influenced the growth of commercial banks and credit unions from 2005 to 2013.

Categorical Competition in the Wake of Crisis: Banks vs. Credit Unions

2021 ◽  
Author(s):  
Aaron K. Chatterji ◽  
Jiao Luo ◽  
Robert C. Seamans
Keyword(s):  
Financial Services ◽  
Commercial Banks ◽  
Credit Unions ◽  
Single Bond ◽  
Community Banks ◽  
Stage Process ◽  
Relative Gains ◽  
Category Typicality ◽  
The U.S

We connect two distinct streams of research on categories to study the role of within-category typicality in the context of legitimacy shocks. We argue that, following a legitimacy shock, member organizations of the tainted, focal category suffer equally, irrespective of their typicality. However, only the typical members of the newly favored, oppositional category benefit. Therefore, the effects of legitimacy shocks are asymmetrically influenced by typicality. We argue this pattern is the result of a two-stage process of categorization by audiences, whereby audiences prioritize distinctions between organizations in a newly favored category and spend limited efforts considering distinctions in the tainted, focal category. We examine our theory in the context of the U.S. financial services industry, where four different kinds of organizations engage in competition: traditional commercial banks, community banks, single-bond credit unions, and multibond credit unions. Consistent with our theory, we show that both traditional commercial banks and community banks suffer in terms of deposit market share following the legitimacy shock of the 2007 financial crisis, but the relative gains to credit unions are strongest for single-bond credit unions.

ARE CREDIT UNIONS LESS EFFICIENT THAN COMMERCIAL BANKS? AN EMPIRICAL ANALYSIS OF OPERATING EFFICIENCY

2017 ◽  
Vol 17 (3) ◽  
pp. 29-36
Author(s):  
Mark Reavis ◽  
Peng Huang
Keyword(s):  
Empirical Analysis ◽  
Commercial Banks ◽  
Credit Unions ◽  
Operating Efficiency

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

2021 ◽  
Vol 55 ◽  
pp. 101340
Author(s):  
Christine Naaman ◽  
Michel Magnan ◽  
Ahmad Hammami ◽  
Li Yao
Keyword(s):  
Commercial Banks ◽  
Credit Unions

scholarly journals Community in Credit Unions: Has banking regulationimpaired CSR in Australian Customer Owned Banks?

2017 ◽  
Vol 9 (4) ◽  
pp. 235
Author(s):  
Dianne McGrath
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Credit Unions ◽  
Regulatory Requirements ◽  
Banking Services ◽  
Csr Reporting ◽  
Mutual Banks

This paper presents a sector scan of a sample of Australian Credit Unions and Mutual Banks to examine the CSR reporting from the perspective of the three pillars model proposed by vanOorschot, de Hoog, van der Steen and van Twist (2013). It is argued that the pillar requiringco-operatives to ensure activities which ‘aim for change’, should promote increasing adoptionof CSR. The paper theorises that regulatory requirements imposed in Australia on all bankinginstitutions carry a higher proportional cost to the customer owned banking sector than theshareholder based commercial banks. This consumption of the limited financial resourcesavailable in this sector of banking services, are inhibiting regional Customer Owned Bankingproviders, as co-operative organisations, to fulfil the required co-operative principle to instigatechange for the betterment of communities. This failure could signal the demise of some entitiesin the jurisdiction of Customer Owned Banking.

Profitability of Credit Unions, Commercial Banks and Savings Banks: A Comparative Analysis

1996 ◽  
Vol 40 (1) ◽  
pp. 66-78 ◽  
Author(s):  
Surendra K. Kaushik ◽  
Raymond H. Lopez
Keyword(s):  
Commercial Banks ◽  
Price Competition ◽  
Credit Unions ◽  
The United States ◽  
Credit Union ◽  
Equity Capital ◽  
Depository Institutions ◽  
Savings Banks ◽  
Loan Portfolios ◽  
Interest Margins

The liberalization of product and price competition among depository intermediaries in the United States has tended to make them more similar since enactment of the Depository Institutions Deregulation and Monetary Control Act in 1980 (DIDMCA). Credit unions have developed into highly efficient organizations for meeting the basic financial needs of their members. Credit unions, although only one-twelfth their size, are at least as profitable as commercial banks and savings banks. The savings banking industry has maintained its competitive profitability as the industry has shrunk in the late 1980's and early 1990's. Credit union loan portfolios have grown more rapidly than either commercial banks' or savings institutions‘. Their net interest margins have been above the banks' in recent years. Growth in the equity capital accounts of credit unions has been consistently more than double that of commercial banks since 1985, giving them a substantial advantage with regard to overall “safety and soundness” compared with commercial and savings banks.

scholarly journals The australian banking sector reforms: Progress and challenges

2013 ◽  
Vol 10 (4) ◽  
pp. 469-478
Author(s):  
Sheilla Nyasha ◽  
Nicholas M. Odhiambo
Keyword(s):  
Banking Sector ◽  
Banking System ◽  
Credit Unions ◽  
Capital Adequacy ◽  
Australian Government ◽  
The Past ◽  
Reserve Bank ◽  
The World ◽  
Building Societies ◽  
Bank Concentration

This paper gives an overview of the Australian banking sector; it highlights the reforms since the 1970s; it tracks the growth of the banking sector in response to the reforms implemented over the past five decades; and finally, it highlights the challenges facing the Australian banking sector. The country’s banking sector consists of more than 60 commercial banks, with the Reserve Bank of Australia, the country’s central bank, at the apex. Since the 1980s, the Australian government has implemented a number of banking sector reforms in order to safeguard and improve the banking sector. The response to these reforms by the banking sector has been varied. As a result of these reforms, there has been an increase in the number of banks and a decrease in the number of building societies and credit unions. There has also been an improvement in the central bank’s oversight of the financial institutions, and an enforcement of the banks’ capital-adequacy requirements. Currently, Australia has one of the most developed banking systems in the world. The country has enjoyed a substantial bank-based financial sector development over the years, and its institutional framework has also grown stronger. However, like any other country’s financial system, the Australian banking system still faces wide-ranging challenges, such as bank concentration and exposure.

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