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Economies of scale and continuing consolidation of credit unions

Author

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  • James A. Wilcox

Abstract

This Economic Letter shows that, in contrast to banks, larger credit unions, on average, have decidedly lower average costs and higher net incomes, as we might expect in the presence of important economies of scale. It further notes that these economies of scale put pressure on the credit union industry to continue consolidating into fewer, larger credit unions. It also describes how some recent legislation may have further added to the pressures on both the banking and credit union industries to consolidate.

Suggested Citation

  • James A. Wilcox, 2005. "Economies of scale and continuing consolidation of credit unions," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue nov4.
    • Handle: RePEc:fip:fedfel:y:2005:i:nov4:n:2005-29
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    File URL: http://www.frbsf.org/publications/economics/letter/2005/el2005-29.html
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    File URL: http://www.frbsf.org/publications/economics/letter/2005/el2005-29.pdf
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    References listed on IDEAS

    as
    1. James A. Wilcox, 2005. "Credit union failures and insurance fund losses: 1971-2004," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue aug19.
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    Cited by:

    1. Bauer, Keldon, 2008. "Detecting abnormal credit union performance," Journal of Banking & Finance, Elsevier, vol. 32(4), pages 573-586, April.
    2. Emir Malikov & Diego A. Restrepo-Tobón & Subal C. Kumbhakar, 2018. "Heterogeneous credit union production technologies with endogenous switching and correlated effects," Econometric Reviews, Taylor & Francis Journals, vol. 37(10), pages 1095-1119, November.
    3. James A. Wilcox, 2006. "Performance divergence of large and small credit unions," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue aug4.
    4. Malikov, Emir & Kumbhakar, Subal C. & Sun, Yiguo, 2016. "Varying coefficient panel data model in the presence of endogenous selectivity and fixed effects," Journal of Econometrics, Elsevier, vol. 190(2), pages 233-251.
    5. Javier Gómez‐Biscarri & Germán López‐Espinosa & Andrés Mesa‐Toro, 2022. "Drivers of depositor discipline in credit unions," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(4), pages 849-885, December.

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