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Article
Publication date: 9 May 2008

Krishnan Dandapani, Gordon V. Karels and Edward R. Lawrence

Existing empirical evidence indicates internet banks worldwide have underperformed newly chartered traditional banks mainly because of their higher overhead costs. The purpose of…

3121

Abstract

Purpose

Existing empirical evidence indicates internet banks worldwide have underperformed newly chartered traditional banks mainly because of their higher overhead costs. The purpose of this paper is to examine the impact of internet banking services on credit union activity.

Design/methodology/approach

The impact of internet banking services on credit union over the period 1999‐2006 was studied and regression equations were estimated for the growth in assets, operating expenses and return on assets as functions of portfolio characteristics, economic conditions and a dummy variable indicating if the credit union has adopted internet banking services.

Findings

The operating costs of credit unions providing web access were found to be significantly higher than those credit unions which do not have any web account offerings. There is increased growth in assets for the credit unions which have worldwide web accounts although this relationship is statistically significant in only three of the eight years studied. The return on assets show that the credit unions with web accounts have similar average profitability to those credit unions that do not provide the facility of internet access to their customers.

Research limitations/implications

Consideration could be given to running the regressions with the number of years the web site has been in place instead of just a dummy variable and putting in common bond dummy variables. Some common bonds are so narrow it may not pay to have internet services.

Practical implications

Even though there are costs associated with providing internet services, the retention of profitability and the evidence of potentially higher asset growth rates suggest the importance of internet banking and the trend of internet banking adoption is expected to continue in the near future in the credit union industry.

Originality/value

This is a pioneering study on the effect of internet banking services on the costs, growth and profitability of Credit Unions in the USA.

Details

Managerial Finance, vol. 34 no. 6
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 February 1996

W. John Turner

Examines the changes that have taken place in personal banking in the 1980s and 1990s in the UK and the impact that these changes have had on the C2D market segment. Suggests…

2098

Abstract

Examines the changes that have taken place in personal banking in the 1980s and 1990s in the UK and the impact that these changes have had on the C2D market segment. Suggests that, following efforts to attract such customers in the early and mid‐1980s, the banks have been following a strategy of de‐marketing to these customers in the late 1980s and 1990s. Suggests that this strategy may be misguided. Draws parallels with recent developments in food retailing which would suggest that new banking concepts are needed rather than neglect or abandonment of market segments. Examines the development of credit unions in the 1980s and 1990s. These provide an alternative banking concept which is successful and well liked by its members but which in the UK (unlike other developed countries) has yet to achieve a significant foothold in the mainstream financial services marketplace. Suggests that bringing closer together the clearing banks and the credit union movement could form the basis of a new banking concept, with benefits for all parties.

Details

International Journal of Bank Marketing, vol. 14 no. 1
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 3 August 2015

Diego Valiante

The purpose of this paper is to assess the impact of the impact of the single currency on the institutional design of the banking union, through evidence on the financial…

398

Abstract

Purpose

The purpose of this paper is to assess the impact of the impact of the single currency on the institutional design of the banking union, through evidence on the financial integration process.

Design/methodology/approach

Data analysis uses multiple sources of data on key drivers of financial fragmentation. The paper starts from a snapshot the status of financial integration and then identifies the main components of this trend.

Findings

Evidence shows that financial integration in the euro area between 2010 and 2014 retrenched at a quicker pace than outside the monetary union. Home bias persisted. Under market pressures, governments compete on funding costs by supporting “their” banks with massive state aids, which distorts the playing field and feed the risk-aversion loop. This situation intensifies frictions in credit markets, thus hampering the transmission of monetary policies and, potentially, economic growth. Taking stock of developments in the euro area, this paper discusses the theoretical framework of a banking union in a single currency area with decentralised fiscal policy sovereignty. It concludes that, when a crisis looms over, a common fiscal backstop can reduce pressures of financial fragmentation, driven by governments’ moral hazard and banks’ home bias.

Research limitations/implications

Additional research is required to deepen the empirical analysis, with econometric modelling, on the links between governments’ implicit guarantees and banks’ home bias. This is an initial data analysis.

Originality/value

Under market pressure, governments in a single currency area tend to be overprotective (more than countries with full monetary sovereignty) towards their own banking system and so trigger financial fragmentation (enhancing banks’ home bias). To revert that, a common fiscal backstop is an essential element of the institutional design. The paper shows empirical evidence and theory, as well as it identifies underlying market failures. It links the single currency to the institutional design of a banking union. This important dimension is brought into a coherent framework.

Details

Journal of Financial Economic Policy, vol. 7 no. 3
Type: Research Article
ISSN: 1757-6385

Keywords

Book part
Publication date: 23 October 2017

Dragan Momirović, Marko Janković and Maja Ranđelović

The economic and financial crisis, especially the sovereign debt crisis, discovered many deficiencies and weaknesses in the banking sector in the European Union (EU). The need for…

Abstract

The economic and financial crisis, especially the sovereign debt crisis, discovered many deficiencies and weaknesses in the banking sector in the European Union (EU). The need for special surveillance and supervision of cross-border banking cooperation and termination of the toxic link between sovereign debt and banking sector have accelerated the process of forming and establishing a Banking Union (BU). An integrated financial framework has been established in which the European Central Bank (ECB) through the Single Supervisory Mechanism (SSM) has a key role and the responsibility for the overall supervision of the banking sector of the euro zone. The Single Resolution Mechanism (SRM) and schemes of the Single Deposit Guarantee Mechanism (SDGM) are under the national supervisory authorities while the European Banking Authority (EBA) is responsible for developing the Single Rules. From the new architecture is expected the preservation of the single market and a common currency, breaking “toxic connections” between sovereign debt and banks, mitigation and removal of financial instability and economic growth. The research shows that the BU together with the ECB in a certain sense, also contributes to the normalization of credit and financial conditions in the single mark. Estimates through SSM, conducted by the ECB and the EBA, during, 2014 and 2015 on 107 banks in 21 countries indicate progress toward solvency and resilience of the banking system of the euro area. Despite some initial success the entire project BU seems to have missed on opportunities, resulted in late reactions, and was too complex to be feasible. The political will of national governments to give up sovereignty over its banking sector and transfer competencies to the supranational institutions is a key factor in the success or failure of a BU. It seems so but past experience indicates that there is no political willingness to solve problems. Mainly most of the government avoids cleaning a hidden “skeleton in closets” due to lack of means for recapitalization while some are trying for loans from the ECB to help their banks. The ECB plays a key oversight role at the EU level and has too much power, which can cause risks caused by conflicting goals. The ECB is losing the role of the final refuge of liquidity, which is the main disadvantage of a BU. The SSM is susceptible to criticism due to difficulty in operation because of slow incorporation of European legislation into national law. Slow implementation carries risks of fragmentation of the market, regardless of the responsibility of the ECB. The financial capacity of the temporary agreement with the SRM is insufficient in solving the crisis of more banks while procedural application is complex and time-consuming. Planned backstop with a centralized resource is a resolution that is insufficient for solving the failure of big systemic banks, which are too big to bail. The heterogeneity of the existing Deposit Guarantee Schemes (DGS) and the banking systems of the member states of the euro zone caused controversy in terms of setting of common insurance schemes. The procedures for the recovery and resolution of critical banks are problematic.

Details

Economic Imbalances and Institutional Changes to the Euro and the European Union
Type: Book
ISBN: 978-1-78714-510-8

Keywords

Article
Publication date: 1 June 2001

David Peetz and Patricia Todd

Bank unionism illustrates some of the diverse experiences of Malaysian unions in a seemingly hostile legislative environment. The National Union of Bank Employees (NUBE) is a…

4177

Abstract

Bank unionism illustrates some of the diverse experiences of Malaysian unions in a seemingly hostile legislative environment. The National Union of Bank Employees (NUBE) is a powerful union that contrasts with in‐house unions in several banks and which shows that it is not impossible for Malaysian unions to organise and secure gains for members. Its experience illustrates the importance for union prosperity of: workplace union activity; the capacity to protect members from insecurity and arbitrary treatment; workplace reform strategies; internal discourse; education and training; union culture; creative and strategic approaches to industrial action; and the role of politics in industrial relations.

Details

International Journal of Manpower, vol. 22 no. 4
Type: Research Article
ISSN: 0143-7720

Keywords

Open Access
Article
Publication date: 5 June 2020

Manuela Gonçalves Barros, Marcelo Botelho da Costa Moraes, Alexandre Pereira Salgado Junior and Marco Antonio Alves de Souza Junior

The purpose of this paper is to evaluate the efficiency in financial intermediation and the cost efficiency in banking service of credit unions in Brazil, based on essentially…

1821

Abstract

Purpose

The purpose of this paper is to evaluate the efficiency in financial intermediation and the cost efficiency in banking service of credit unions in Brazil, based on essentially accounting variables, and to analyze the temporal evolution of the efficiency of these cooperatives.

Design/methodology/approach

With a sample of 315 cooperatives over the period from 2007 to 2014, this research uses a two-stage process: application of regression models with panel data to verify which variables are related to the defined outputs, with the reduction of 31 variables to 8 variables in both models; and application of the data envelopment analysis method to obtain an analysis of credit unions’ efficiency.

Findings

The results demonstrate a high level of efficiency in financial intermediation, with low variation over time, associated with a low efficiency in the banking service, in which few cooperatives have remained efficient over time. In addition, the cooperatives with highest efficiency in financial intermediation were also the most efficient in providing services.

Research limitations/implications

This research has some limitations about the capacity of the proxies used to capture the real effect of the variables and assumptions of economic relations resulting in restrictions to generalize the results.

Practical implications

Cooperatives are usually analyzed under just one dimension. By separating the analysis into financial intermediation and banking services, cooperatives that are more efficient in each dimension can be identified, in addition to analyzing the evolution over time. The authors found that efficiency tends to be lower in banking services, and few cooperatives remain at the highest level of efficiency over time in both models.

Social implications

Credit unions provide an important service in the banking and credit market. Therefore, understanding its operation and the characteristics that influence its efficiency allows a better management of the cooperatives themselves and a greater understanding of this important segment of the financial market.

Details

RAUSP Management Journal, vol. 55 no. 3
Type: Research Article
ISSN: 2531-0488

Keywords

Article
Publication date: 31 October 2018

Benjamin Amoah, Kwaku Ohene-Asare, Godfred Alufar Bokpin and Anthony Q.Q. Aboagye

The purpose of this paper is to investigate the factors that tend to influence credit union efficiency, specifically examining cost efficiency (CE) and technical efficiency.

Abstract

Purpose

The purpose of this paper is to investigate the factors that tend to influence credit union efficiency, specifically examining cost efficiency (CE) and technical efficiency.

Design/methodology/approach

Using a two-stage method, the authors first estimate CE using Tones’ SBM data envelopment analysis method and technical efficiency in a variable returns to scale setting during the period 2008–2014. The authors estimate a mixed-effects and two-limit Tobit regression to examine the effect of credit union specific characteristics, banking industry and macroeconomic conditions, on efficiency.

Findings

Credit unions’ CE averaged 38.9 percent compared to 54.4 percent for technical efficiency. The authors find that technical efficiency does not translate into CE and vice versa.

Practical implications

The authors suggest that when targeting CE, credit union managers would have to make technical efficiency a priority. A monopolized and inefficient banking sector does not challenge efficiency improvement in the credit unions industry.

Originality/value

This study employs data from a frontier market.

Details

Managerial Finance, vol. 44 no. 11
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 10 August 2020

Tomáš Konečný and Lukáš Pfeifer

This paper aims to focus on capital-related macroprudential policies in the context of recent policy discussions on the removal of barriers to the mobility of capital and…

Abstract

Purpose

This paper aims to focus on capital-related macroprudential policies in the context of recent policy discussions on the removal of barriers to the mobility of capital and liquidity of cross-border banks in the European Union (EU).

Design/methodology/approach

This study first discusses the link between financial stability and internal resource mobility of cross-border banks. Then, it examines past heterogeneity in structural capital buffers as key macroprudential capital instruments applied in the EU and relate them to costs of policy action, degree of foreign penetration and membership in the Banking Union.

Findings

Observed phase-in patterns of structural capital buffers in the EU are broadly consistent with costs of policy action, degree of foreign penetration and membership in the Banking Union as potential factors. The process of financial integration could be further enhanced through reduced uncertainty in the application of macroprudential policies that constrain capital mobility of cross-border banks.

Originality/value

This paper anchors macroprudential policies into a wider discussion on the mechanism and implications of ring-fencing in the EU over time. It discusses two policy areas, macroprudential policies and proposals for deeper financial integration, that share the same financial stability objective but tend to emphasize different implications of the mobility of capital and liquidity of cross-border banks in the EU. The study provides a discussion of potential implications of the recent adoption of the CRRII/CRDV legislation for future heterogeneity of macroprudential policies in the EU.

Details

Journal of Financial Regulation and Compliance, vol. 29 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 1 August 2001

Gregor Gall

This article critically examines the proposition that industrial relations in banking in the UK are undergoing a move from paternalism to adversarialism and then to partnership…

2438

Abstract

This article critically examines the proposition that industrial relations in banking in the UK are undergoing a move from paternalism to adversarialism and then to partnership. It uses these as ideal‐types totrack and explain the developments in industrial relations and argues that the sectoris sufficiently diverse across space and time and subject to different forces as tobelie sucha straight‐forward and simple characterisation.

Details

Employee Relations, vol. 23 no. 4
Type: Research Article
ISSN: 0142-5455

Keywords

Article
Publication date: 7 April 2015

Santiago Carbó-Valverde, Harald A. Benink, Tom Berglund and Clas Wihlborg

The purpose of this paper by the European Shadow Financial Regulatory Committee (ESFRC) is to provide an account of the financial crisis in Europe during the period 2010-2013 and…

1938

Abstract

Purpose

The purpose of this paper by the European Shadow Financial Regulatory Committee (ESFRC) is to provide an account of the financial crisis in Europe during the period 2010-2013 and an analysis of how the relevant authorities reacted to the crisis.

Design/methodology/approach

These actions included measures taken by central banks, governments or fiscal authorities, and by regulatory or supervisory bodies. In a previous study covering the regulatory developments during the financial crisis up until 2009, issues such as the implementation of Basel III rules in Europe and the (mostly ad hoc and unilateral) resolution mechanisms set in most European countries to fight the crisis were covered. This study focuses on developments since 2010 with a focus on the concerns and actions that emerged with the sovereign debt crisis in the euro area. In particular, the transition from the European Financial Stability Facility to the European Stability Mechanism is assessed. The focus after 2012 has progressively turned to the challenges of the European banking union.

Findings

These issues are jointly covered, along with some updates on the views of the ESFRC on recent advances in other areas, such as solvency regulation. All in all, the authors find that the weaknesses of the global financial system remain to be addressed, and they believe that the banking union is one of the main tools and opportunities for an improved and efficient crisis management in Europe.

Originality/value

The paper aims at contributing to the study of financial regulation after the banking crisis. The experience of the euro zone in this context is assessed in this article from a wide range of perspectives.

Details

Journal of Financial Economic Policy, vol. 7 no. 1
Type: Research Article
ISSN: 1757-6385

Keywords

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