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Specific credit risk determinants in cooperative and commercial banks
,
Jakub Markiewicz
https://doi.org/10.26354/bb.4.1.78.2020
Abstract
Credit risk is an inherent part of the functioning of banks and is multi-conditional. Credit risk factors in commercial banks and cooperative banks are in principle similar, though their significance is not identical. One of the most important differences is the ability to mobilize equity (equity or share capital), as well as nonidentical strength of the influence of shareholder owners on planned results of operations. The situation regarding organizational restructuring in both sectors or the way of strengthening the market position is also different. All this results in endogenous factors having greater impact on credit risk in the cooperative sector. However, the influence of exogenous factors has a significant impact on credit risk of both commercial and cooperative banks, although cooperative banks are less sensitive to the business cycle. Still, the concept of collective responsibility of the group under cooperative protection systems (IPS – institutional protection scheme) requires a restrictive approach to violating both regulatory and market discipline in order to nip in the bud the temptation to abuse one of the group’s members at the expense of others. The conducted model empirical analyses should be continued using time series of panel data and updating the assumptions, which would make it possible to authenticate the differences found between cooperative and commercial banks.
Keywords:
credit risk , commercial banks , cooperative banks , banking regulationsJEL Codes
G21, C5Download files
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Vol. 78 No. 1 (2020)
Published: 2023-11-02
10.26354
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.