The Federal Deposit Insurance Fund That Didn't Put A Bite on U.S. Tax Payers
Unlike the Federal Savings and Loan Insurance Corporation and the Bank Insurance Fund, the National Credit Union Share Insurance Fund (NCUSIF) entered the 1990s in a state of accounting solvency. This paper develops evidence to show the more important fact that NCUSIF remained solvent in a market-value sense as well. Differences in institutional product lines and risk-taking opportunities between credit unions and banks and thrifts are not consequential enough to explain the differences in their funds' health. This paper explains how differences in decisionmaking environments made managerial and regulatory risk-taking incentives in the credit-union industry diverge substantially from those governing banks and S&Ls. The differences in incentive structure support the hypothesis that private coinsurance could lessen taxpayer loss exposure elsewhere in the federal deposit insurance system.
|Date of creation:||Feb 1994|
|Publication status:||published as Journal of Banking and Finance, 20(September,1996), pp.1305-1327|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
- Edward J. Kane, 1988. "Changing incentives facing financial-services regulators," Proceedings, Federal Reserve Bank of Cleveland, pages 265-279.
- Smith, Donald J, 1984. " A Theoretic Framework for the Analysis of Credit Union Decision Making," Journal of Finance, American Finance Association, vol. 39(4), pages 1155-1168, September.
- Maksimovic, Vojislav & Unal, Haluk, 1993. " Issue Size Choice and "Underpricing" in Thrift Mutual-to-Stock Conversions," Journal of Finance, American Finance Association, vol. 48(5), pages 1659-1692, December.
- Smith, Bruce D & Stutzer, Michael, 1995. "A Theory of Mutual Formation and Moral Hazard with Evidence from the History of the Insurance Industry," Review of Financial Studies, Society for Financial Studies, vol. 8(2), pages 545-577.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
- Smith, Donald J & Cargill, Thomas F & Meyer, Robert A, 1981. "An Economic Theory of a Credit Union," Journal of Finance, American Finance Association, vol. 36(2), pages 519-528, May.
- Guinnane, T. & Banerjee, A. & Besley, T., 1993.
"Thy Neighbor's Keeper: the Design of a Credit Cooperative with Theory and a Test,"
705, Yale - Economic Growth Center.
- Abhijit V. Banerjee & Timothy Besley & Timothy W. Guinnane, 1994. "Thy Neighbor's Keeper: The Design of a Credit Cooperative with Theory and a Test," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 491-515.
- Tripp, James D & Smith, Stanley D, 1993. "U.S. Credit Union Motivation for Involvement in the First-Mortgage Market," The Journal of Real Estate Finance and Economics, Springer, vol. 7(3), pages 229-236, November.
- Robert C. Merton & Zvi Bodie, 1992. "On the Management of Financial Guarantees," Financial Management, Financial Management Association, vol. 21(4), Winter.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:4648. 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: ()
If references are entirely missing, you can add them using this form.