Uninsured deposits and excess share insurance at US credit unions: the impact on risk and returns to members

Shane A. Van Dalsem ()
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Shane A. Van Dalsem: Washburn University

Journal of Economics and Finance, 2017, vol. 41, issue 4, No 5, 714-738

Abstract: Abstract Using NCUA credit union call report data, I find that uninsured depositors and excess share insurers provide valuable monitoring benefits for credit unions for the years following the 2008 financial crisis. I find that the capital ratio, liquidity ratio, and delinquencies-to-total loans and leases decrease with an increase in the percentage of deposits that exceed the $250,000 per depositor regulatory threshold of standard deposit insurance. The influence of uninsured depositors is generally more significant for small credit unions than large credit unions. The results for the precrisis period are not consistent with those of the postcrisis period. However, the results are consistent across the six-year period following the financial crisis. Overall, the results are consistent with the hypothesis that uninsured depositors are value-maximizing stakeholders who exercise control over the firm.

Keywords: Credit unions; Uninsured deposits; Excess shares; Agency theory; Corporate governance (search for similar items in EconPapers)
JEL-codes: G21 G23 G32 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s12197-016-9376-4

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