IDEAS home Printed from https://ideas.repec.org/p/tut/cremwp/2021-03.html
   My bibliography  Save this paper

A Dual Banking Sector With Credit Unions and Traditional Banks : What Implications on Macroeconomic Performances?

Author

Listed:
  • Thibaud Cargoet

    (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France)

  • Simon Cornée

    (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France)

  • Franck Martin

    (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France)

  • Tovonony Razafindrabe

    (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France)

  • Fabien Rondeau

    (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France)

  • Christophe Tavéra

    (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France)

Abstract

Cet article ́etudie les implications macro ́economiques associées à la présence d’un secteur bancaire dual au sein d’une ́economie. Ce secteur regroupe à parts égales des banques mutualistes et coopératives (credit unions) et des banques de type capitaliste (cette situation s’observe notamment pour la France). Nous adoptons un modélisation macroéconomique de type DSGE idans laquelle les banques mutualistes et coopératives sont différenciées des banques traditionnelles de la manière suivante : elles pratiquent une interm ́ediation financière traditionnelle centrée sur le couple crédits/dépôts avec un recours plus faible aux activités de portefeuilles ; elles se concentrent principalement sur le financement des ménages et des petites et moyennes entreprises ; elles ont enfin un pass-through de taux d’int érêt plus faible que les banques traditionnelles. Les simulations du modèle montrent que cette configuration du secteur bancaire diminue le caractère contra-cyclique de la politique mon ́etaire mais elle constitue en revanche un facteur stabilisant pour l’économie. This article studies the macroeconomic implications generated by a dual banking sector. By dual sector, we refer to a banking sector including mutual and cooperative banks (credit unions) and traditional banks operate in substantially equal parts (as the case of France for example). We propose a DSGE macroeconomic model integrating a dual banking sector. Mutual and cooperative banks are differentiated from capitalist banks in the following way: they practice traditional financial intermediation centered on the loan - deposit pair with less recourse to portfolio activities; they mainly focus on financing households and small and medium-sized enterprises; Finally, they have a lower interest rate pass-through than traditional banks. Model simulations show that this configuration of the banking sector reduces the counter-cyclical property of monetary policy, but on the other hand it constitutes a stabilizing factor for the economy.

Suggested Citation

  • Thibaud Cargoet & Simon Cornée & Franck Martin & Tovonony Razafindrabe & Fabien Rondeau & Christophe Tavéra, 2021. "A Dual Banking Sector With Credit Unions and Traditional Banks : What Implications on Macroeconomic Performances?," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2021-03, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    • Handle: RePEc:tut:cremwp:2021-03
    as

    Download full text from publisher

    File URL: https://ged.univ-rennes1.fr/nuxeo/site/esupversions/cd91500b-3aee-4803-9f5a-55792c7e129d
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Patrick Bolton & Xavier Freixas & Leonardo Gambacorta & Paolo Emilio Mistrulli, 2016. "Relationship and Transaction Lending in a Crisis," The Review of Financial Studies, Society for Financial Studies, vol. 29(10), pages 2643-2676.
    2. Matteo Iacoviello, 2005. "House Prices, Borrowing Constraints, and Monetary Policy in the Business Cycle," American Economic Review, American Economic Association, vol. 95(3), pages 739-764, June.
    3. Acosta, Pablo A. & Lartey, Emmanuel K.K. & Mandelman, Federico S., 2009. "Remittances and the Dutch disease," Journal of International Economics, Elsevier, vol. 79(1), pages 102-116, September.
    4. Gambacorta, Leonardo, 2008. "How do banks set interest rates?," European Economic Review, Elsevier, vol. 52(5), pages 792-819, July.
    5. Andrea Gerali & Stefano Neri & Luca Sessa & Federico M. Signoretti, 2010. "Credit and Banking in a DSGE Model of the Euro Area," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(s1), pages 107-141, September.
    6. Olivier de BANDT & Mohammed CHAHAD, 2018. "A DGSE model to assess the post-crisis regulation of universal banks," Rue de la Banque, Banque de France, issue 67, September.
    7. Angelini, P. & Di Salvo, R. & Ferri, G., 1998. "Availability and cost of credit for small businesses: Customer relationships and credit cooperatives," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 925-954, August.
    8. Mr. Wim Fonteyne, 2007. "Cooperative Banks in Europe—Policy Issues," IMF Working Papers 2007/159, International Monetary Fund.
    9. B. Campagne & A. Poissonnier, 2016. "MELEZE: A DSGE model for France within the Euro Area," Documents de Travail de l'Insee - INSEE Working Papers g2016-05, Institut National de la Statistique et des Etudes Economiques.
    10. Becchetti, Leonardo & Ciciretti, Rocco & Paolantonio, Adriana, 2016. "The cooperative bank difference before and after the global financial crisis," Journal of International Money and Finance, Elsevier, vol. 69(C), pages 224-246.
    11. Ferri, Giovanni & Kalmi, Panu & Kerola, Eeva, 2014. "Does bank ownership affect lending behavior? Evidence from the Euro area," Journal of Banking & Finance, Elsevier, vol. 48(C), pages 194-209.
    12. Simon Cornée & Lucrezia Fattobene & Marco Migliorelli, 2018. "An Overview of Cooperative Banking in Europe," Post-Print halshs-02888969, HAL.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meriläinen, Jari-Mikko, 2016. "Lending growth during the financial crisis and the sovereign debt crisis: The role of bank ownership type," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 41(C), pages 168-182.
    2. Simon Cornée & Anastasia Cozarenco & Ariane Szafarz, 2023. "The Changing Role of Banks in the Financial System: Social Versus Conventional Banks," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Chrysovalantis Gaganis & Fotios Pasiouras & Menelaos Tasiou & Constantin Zopounidis (ed.), Sustainable Finance and ESG, pages 1-25, Palgrave Macmillan.
    3. Stefano Filomeni & Michele Modina & Elena Tabacco, 2023. "Trade credit and firm investments: empirical evidence from Italian cooperative banks," Review of Quantitative Finance and Accounting, Springer, vol. 60(3), pages 1099-1141, April.
    4. Chawwa, Tevy, 2021. "Impact of reserve requirement and Liquidity Coverage Ratio: A DSGE model for Indonesia," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 321-341.
    5. Pierluigi Murro & Valentina Peruzzi, 2018. "Cooperative banks and income inequality: Evidence from Italian provinces," Working Papers CASMEF 1804, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    6. Simon Cornée & Panu Kalmi & Ariane Szafarz, 2020. "The Business Model of Social Banks," Kyklos, Wiley Blackwell, vol. 73(2), pages 196-226, May.
    7. Olivier de BANDT & Mohammed CHAHAD, 2018. "A DGSE model to assess the post-crisis regulation of universal banks," Rue de la Banque, Banque de France, issue 67, September.
    8. Raoul Minetti & Pierluigi Murro & Valentina Peruzzi, 2021. "Not All Banks Are Equal: Cooperative Banking And Income Inequality," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 420-440, January.
    9. Minetti, Raoul & Murro, Pierluigi & Peruzzi, Valentina, 2019. "One size does not fit all. Cooperative banking and income inequality," Working Papers 2019-10, Michigan State University, Department of Economics.
    10. Danilo Liberati, 2018. "An estimated DSGE model with search and matching frictions in the credit market," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 11(6), pages 567-617.
    11. Nitani, Miwako & Legendre, Nicolas, 2021. "Cooperative lenders and the performance of small business loans," Journal of Banking & Finance, Elsevier, vol. 128(C).
    12. McKillop, Donal & French, Declan & Quinn, Barry & Sobiech, Anna L. & Wilson, John O.S., 2020. "Cooperative financial institutions: A review of the literature," International Review of Financial Analysis, Elsevier, vol. 71(C).
    13. Paolo Coccorese & Laura Santucci, 2020. "Banking Competition and Bank Size: Some Evidence from Italy," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(2), pages 278-299, April.
    14. Dereeper, Sébastien & Lobez, Frédéric & Statnik, Jean-Christophe, 2020. "Bank credit rates across the business cycle: Evidence from a French cooperative contracts database," Journal of Banking & Finance, Elsevier, vol. 112(C).
    15. repec:zbw:bofrdp:2016_016 is not listed on IDEAS
    16. Hollander, Hylton & Liu, Guangling, 2016. "Credit spread variability in the U.S. business cycle: The Great Moderation versus the Great Recession," Journal of Banking & Finance, Elsevier, vol. 67(C), pages 37-52.
    17. Mădălin Viziniuc, 2017. "Potential Gains from Cooperation Between Monetary and Macroprudential Policies: The Case of an Emerging Economy," Eastern European Economics, Taylor & Francis Journals, vol. 55(5), pages 420-452, September.
    18. Yépez, Carlos A., 2018. "Financial intermediation and real estate prices impact on business cycles: A Bayesian analysis," The North American Journal of Economics and Finance, Elsevier, vol. 45(C), pages 138-160.
    19. Romain Houssa & Jolan Mohimont & Chris Otrok, 2019. "A model for international spillovers to emerging markets," Working Paper Research 370, National Bank of Belgium.
    20. Arruda Gustavo & Lima Daniela & Teles Vladimir Kühl, 2020. "Household borrowing constraints and monetary policy in emerging economies," The B.E. Journal of Macroeconomics, De Gruyter, vol. 20(1), pages 1-21, January.
    21. Vo Le & Kent Matthews & David Meenagh & Patrick Minford & Zhiguo Xiao, 2014. "Banking and the Macroeconomy in China: A Banking Crisis Deferred?," Open Economies Review, Springer, vol. 25(1), pages 123-161, February.

    More about this item

    Keywords

    Banking sector; Credit Unions; DSGE Model; Monetary Policy;
    All these keywords.

    JEL classification:

    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G2 - Financial Economics - - Financial Institutions and Services

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tut:cremwp:2021-03. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: GERMAIN Lucie (email available below). General contact details of provider: https://edirc.repec.org/data/crmrefr.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.