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Imposing Capital Controls on Credit Unions: An Analysis of Regulatory Intervention in Australia
Author(s) -
Greinke Andrew
Publication year - 2005
Publication title -
annals of public and cooperative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.526
H-Index - 37
eISSN - 1467-8292
pISSN - 1370-4788
DOI - 10.1111/j.1370-4788.2005.00285.x
Subject(s) - capital adequacy ratio , capital (architecture) , equity (law) , credit union , financial capital , commission , economics , equity capital , monetary economics , business , financial system , capital market , finance , human capital , market economy , political science , archaeology , law , history , incentive
** : What impacts would minimum capital requirements have on mutual institutions lacking the ability to raise equity capital? Can the response of credit unions to capital controls be explained by internal member bonding? The imposition of capital controls on credit unions by the Australian Financial Institutions Commission is studied as a Box‐Tiao time series quasi‐experiment. Time series intervention and trend analyses are performed on a sample of 150 credit unions over the period 1987 to 1997, together with cross‐sectional regressions of the estimated responses. The results demonstrate that the capital controls had a significant impact on credit union behavior. Consistent with theoretical expectations, the response of individual credit unions is found to be a function of initial capital levels and internal member bonding .