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Prudence and Financial Self-Regulation in Credit Unions in Northern Ireland

Ward, Anne Marie and Forker, John (2012) Prudence and Financial Self-Regulation in Credit Unions in Northern Ireland. The British Accounting Review, 44 (4). pp. 231-244. [Journal article]

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DOI: 10.1016/j.bar.2012.09.001


Credit unions in Northern Ireland are subject to a unique combination of statutoryoversight and self-regulation. This paper investigates the association betweenprudence and the monitoring of financial ratios by credit union trade associations.We find that compliance with the mandated level of capital reserves is uniformlyhigh, regardless of the existence or extent of self-regulation. However, aftercontrolling for cross sectional differences in profitability, age, size, growth andcommon bond type a positive association exists between self-regulation andfinancial ratios measuring prudence and loan book quality. These findings havepolicy implications for the regulation of credit unions in Northern Ireland andelsewhere regarding potential regulatory cost savings from reliance on selfregulationprovided by trade associations.

Item Type:Journal article
Keywords:credit unions, regulation, prudence
Faculties and Schools:Ulster Business School > Department of Accounting, Finance and Economics
Ulster Business School
Research Institutes and Groups:Business and Management Research Institute
ID Code:23517
Deposited By: Professor Anne-Marie Ward
Deposited On:15 Jan 2013 09:04
Last Modified:15 Jan 2013 09:04

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