The Effect of the Common Bond and Membership Expansion on Credit Union Risk

W Frame, Gordon V. Karels and Christine McClatchey

The Financial Review, 2002, vol. 37, issue 4, 613-636

Abstract: This paper empirically examines differences in credit union risk profiles based on membership type and membership expansion via select employee groups (SEGs). We find that (1) occupational credit unions have a greater exposure to concentration risk, which they hedge by holding greater proportions of capital, (2) the presence of SEGs is negatively related to credit union capital ratios and positively related to loan–to–share ratios, and (3) the number of SEGs and the proportion of loan delinquencies are positively related. We conclude that credit union membership expansion results in reduced concentration risk and expanded investment opportunities, but also dilutes the informational advantages associated with tight common bonds.

Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
https://doi.org/10.1111/1540-6288.00031

Related works:
Working Paper: The effect of the common bond and membership expansion on credit union risk (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:finrev:v:37:y:2002:i:4:p:613-636

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0732-8516

Access Statistics for this article

The Financial Review is currently edited by Cynthia J. Campbell and Arnold R. Cowan

More articles in The Financial Review from Eastern Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().