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Is there help indeed, if there is help in need? The case of credit unions during the global financial crisis
Author(s) -
Aghabarari Leila,
Guettler Andre,
Naeem Mahvish,
Van Doornik Bernardus
Publication year - 2021
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12982
Subject(s) - shock (circulatory) , financial crisis , exploit , financial system , corporate governance , economics , business , finance , monetary economics , macroeconomics , medicine , computer security , computer science
Credit unions (CUs) may respond to a financial shock differently than other types of banks because of their unique membership‐based governance structure. We exploit the financial crisis of 2008/09 as a negative shock to Brazilian banks and analyze the lending behavior of CUs in comparison to non‐CUs and the subsequent effects on the commercial clients' labor force. We find that during the financial crisis, CUs tightened their members' access to credit to a lesser extent ( insurance effect ) than did other bank types. Notably, the labor market impact of the insurance effect of CUs is positive for very small firms.