Mutual Banks and Stock Banks

Rasmusen, Eric Bennett

doi:10.1086/467162

Cited by 161 publications

(90 citation statements)

References 20 publications

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“…According to Rasmusen (1988), since managers of MBs cannot own the net assets of their organizations, they cannot fully benefit from an increased variability of returns. Thus MBs should be involved in less risky activities than POBs.…”

Section: Bank Riskmentioning

confidence: 99%

“…MBs have higher expenses (O'Hara, 1981;Mester, 1989;Gropper and Beard, 1995;Esty, 1997), lower asset risk (O'Hara, 1981;Fraser and Zardkoohi, 1996;Esty, 1997) and lower default risk (Rasmusen, 1988;Cordell et al, 1993;Hansmann, 1996;Fraser and Zardkoohi, 1996). However, Altunbas et al (2001) find that German MBs have slight cost and profit advantages over German POBs.…”

Section: Introductionmentioning

confidence: 99%

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Ownership structure, risk and performance in the European banking industry

Iannotta

Nocera

Sironi

2007

Journal of Banking & Finance

792

565

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International audienceWe compare the performance and risk of a sample of 181 large banks from 15 European countries over the 1999-2004 period and evaluate the impact of alternative ownership models, together with the degree of ownership concentration, on their profitability, cost efficiency and risk. Three main results emerge. First, after controlling for bank characteristics, country and time effects, mutual banks and government-owned banks exhibit a lower profitability than privately owned banks, in spite of their lower costs. Second, public sector banks have poorer loan quality and higher insolvency risk than other types of banks while mutual banks have better loan quality and lower asset risk than both private and public sector banks. Finally, while ownership concentration does not significantly affect a bank's profitability, a higher ownership concentration is associated with better loan quality, lower asset risk and lower insolvency risk. These differences, along with differences in asset composition and funding mix, indicate a different financial intermediation model for the different ownership forms

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Section: Bank Riskmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Ownership structure, risk and performance in the European banking industry

Iannotta

Nocera

Sironi

2007

Journal of Banking & Finance

792

565

View full text Add to dashboard Cite

show abstract

“…However, the depositors are in a poor position to determine exactly how the bank is managing their money (Diamond, 1984). Since the owners of SHFs don't share profits but only losses with their depositors, they have pecuniary incentives for opportunistic behavior, including risky lending (Jensen and Meckling, 1976, Hansmann, 1996, Rasmussen, 1988, Arun, 2005.…”

Section: Market Inefficiency # 4: the Cost Of Asymmetric Information mentioning

confidence: 99%

The Cost of Ownership in Microfinance Organizations

2009

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We compare the ownership-cost of Shareholders Firms (SHFs), Non Profit Organizations (NPOs), and Cooperatives (COOPs) involved in microfinance. A paradoxical situation motivates us: most providers, both historically and today, are NPOs or COOPs, while policy papers advocate SHFs. We lay out a theoretical framework to understand ownership costs in microfinance organizations better. We propose that cost variables related to market contracting favor NPOs and COOPs, whereas most cost variables related to the practice of ownership favor SHFs. We conclude that what best serves the customers is the coexistence of ownership types and call for empirical research to test this theory.32

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“…This result is not surprising, as the early credit unions and mutual banks in Europe and North America were affiliated with churches and religious institutions that strived to avoid usury by granting credit at rates lower than their profit-oriented counterparts (see El-Gamal, 2006). Second, with respect to generating growth internally: Rasmusen (1988) illustrates that mutual banks chose less risky investment strategies, thereby providing good opportunities to uninformed depositor (cum shareholder), who have no resources for monitoring bank manager performance.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

Can an Islamic Model of Housing Finance Cooperative Elevate the Economic Status of the Underprivileged?

Ebrahim

2008

SSRN Journal

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Mutual Banks and Stock Banks

Cited by 161 publications

References 20 publications

Ownership structure, risk and performance in the European banking industry

Ownership structure, risk and performance in the European banking industry

The Cost of Ownership in Microfinance Organizations

Can an Islamic Model of Housing Finance Cooperative Elevate the Economic Status of the Underprivileged?

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