Advanced Search
MyIDEAS: Login

The Effect of Captial Ratios on Credit Union Rates Nationwide

Contents:

Author Info

  • Robert J. Tokle
  • Joanne G. Tokle
Registered author(s):

    Abstract

    The average net worth ratio of credit unions has increased substantially over the past twenty years. During this time period, there has been a little pressure by the National Credit Union Administration (NCUA) to increase this ratio. The average net worth ratio of credit unions has increased significantly since 1985 to well beyond the well-capitalized ratio of 7 percent. Much of this increase came in the early 1990's, when falling interest rates, due to an easy monetary policy, helped increase net income for depository institutions.With the average net worth ratio at around 11.4 percent in 2007, how high this ratio should be has continued to be an issue. There are two basic arguments that credit unions should maintain a lower net worth. First, since credit unions are cooperatives, any retained earnings greater than what is needed, given their risks, should go back to the credit union members. Second, credit unions may have to restrict growth if they try to maintain a higher net worth ratio than what is needed. However, adequate net worth is needed to maintain credit union soundness and to protect against interest rate risk and credit risk.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://nysea.bizland.com/nysea/publications/nyer/2008/NYER_2008_p085.pdf
    Download Restriction: no

    File URL: http://nysea.bizland.com/nysea/publications/nyer/2008/NYER_2008_p085.html
    Download Restriction: no

    Bibliographic Info

    Article provided by New York State Economics Association (NYSEA) in its journal New York Economic Review.

    Volume (Year): 39 (2008)
    Issue (Month): 1 ()
    Pages: 85-93

    as in new window
    Handle: RePEc:nye:nyervw:v:39:y:2008:i:1:p:85-93

    Contact details of provider:
    Web page: http://nysea.bizland.com/
    More information through EDIRC

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:nye:nyervw:v:39:y:2008:i:1:p:85-93. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eryk Wdowiak).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.