Economics at your fingertips  

The determinants of UK credit union failure

Jamie Coen (), William Francis () and May Rostom
Additional contact information
Jamie Coen: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH

No 658, Bank of England working papers from Bank of England

Abstract: This paper examines the determinants of credit union failure in the United Kingdom. Using regulatory data on credit unions, we estimate several discrete-time logit models and evaluate their predictive ability at one, two and three-year time horizons. We find that a small set of financial attributes related to capital adequacy, asset quality, earnings performance and liquidity is useful for early identification of troubled credit unions. Both in and out-of-sample results indicate that this parsimonious set of firm-level characteristics, augmented with national and regional unemployment rates, reliably identifies failures while keeping false alarm rates at modest levels. The results provide support for establishing early-warning criteria for supervisory use in monitoring credit unions.

Keywords: Credit unions; failure; early warning; logit; policymaker loss function (search for similar items in EconPapers)
JEL-codes: G21 G28 G38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban and nep-dcm
Date: 2017-04-21
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... 65AC2C0CDCA03584EBF1 Full text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found ( [302 Moved Temporarily]-->

Related works:
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:

Access Statistics for this paper

More papers in Bank of England working papers from Bank of England Bank of England, Threadneedle Street, London, EC2R 8AH. Contact information at EDIRC.
Bibliographic data for series maintained by Digital Media Team ().

Page updated 2019-12-08
Handle: RePEc:boe:boeewp:0658