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Are Cooperative Banks a Lever for Promoting Bank Stability? Evidence from the Recent Financial Crisis in OECD Countries

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  • Laura Chiaramonte
  • Federica Poli
  • Marco Ercole Oriani

Abstract

Based on a sample of cooperative, savings, and commercial banks from OECD countries, this paper examines whether and to what extent cooperative banks affected average bank soundness during 2001–2010. To account for the impact of the recent financial crisis, we analyse separately the pre†crisis period (2001–2006) and crisis years (2007–2010). Unlike published claims that blame the fragility of banking systems on the presence of non–profit†maximising entities, our main finding is that cooperative banks have explanatory power for stabilisation during the crisis years, but only above a certain market share threshold.

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  • Laura Chiaramonte & Federica Poli & Marco Ercole Oriani, 2015. "Are Cooperative Banks a Lever for Promoting Bank Stability? Evidence from the Recent Financial Crisis in OECD Countries," European Financial Management, European Financial Management Association, vol. 21(3), pages 491-523, June.
    • Handle: RePEc:bla:eufman:v:21:y:2015:i:3:p:491-523
    DOI: 10.1111/j.1468-036X.2013.12026.x
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    19. Tan, Yong & Walheer, Barnabé, 2024. "Stability and economic performances in the banking industry: The case of China," The Quarterly Review of Economics and Finance, Elsevier, vol. 95(C), pages 326-345.
    20. Amanda, Citra, 2023. "Rural banking spatial competition and stability," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 492-504.
    21. Diemo Dietrich & Uwe Vollmer, 2024. "Investment externalities, bank liquidity creation, and bank failures," Journal of Economics, Springer, vol. 141(2), pages 137-162, March.
    22. Hassan, M. Kabir & Chiaramonte, Laura & Dreassi, Alberto & Paltrinieri, Andrea & Piserà, Stefano, 2023. "Equity costs and risks in emerging markets: Are ESG and Sharia principles complementary?," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    23. BARRA, Cristian & ZOTTI, Roberto, 2017. "Bank Performance, Financial Stability and Market Competition: do Cooperative and Non-Cooperative Banks Behave Differently?," CELPE Discussion Papers 143, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.

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