Mergers of community banks across economic market areas potentially reduce both idiosyncratic and local market risk. A merger may reduce idiosyncratic risk because the larger post-merger bank has a larger customer base. Negative credit and liquidity shocks from individual customers would have...

One interesting aspect of the financial services industry is that for-profit institutions such as commercial banks compete directly with not-for-profit financial intermediaries such as credit unions. In this article, we analyze competition among banks and between banks and credit unions using a...

The United States experienced a historic boom during the late 1990s and briefly into the new millennium, highlighted by rapid economic and productivity growth, surging corporate profitability, sustained business investment in many areas, including high technology and telecommunications, and a...

National corporate-governance traditions are distinctive, deeply rooted, and difficult to change. Recent research points to a country's legal traditions and its stage of economic development as important determinants of corporate-governance institutions. Common-law countries tend to provide more...

This paper develops an integrated model of pricing and dividend policies in open credit cooperatives (those that do business with members and non-members on a non-discriminatory basis). We show that both the distribution of member preferences and the amount of non-member business the cooperative...

The German system of codetermination contributes to the entrenchment of labor. We show in a two-period model of project choice that entrenched labor leads to underinvestment and overstaffing. We provide empirical evidence that German firms subject to codetermination with equal representation of...

Over the last few decades, the co-operative banking sector in Germany has steadily increased its market share at the expense of other types of banks. This outcome is surprising from the standpoint of traditional economic thinking about co-operatives, which suggests that they are most appropriate...

Corporate governance practices differ greatly in the United States and Germany. This paper describes the main institutional features of the German corporate governance system, focusing on universal banks and codetermination. The paper also summarizes existing empirical evidence that has...

We model competition in local deposit markets between for-profit and not-for-profit financial institutions. For-profit retail banks may offer a superior bundle of financial services, but not-for-profit (occupational) credit unions enjoy sponsor subsidies that allow them to capture a share of the...

Central banks and private banks alike have advocated greater use of interbank netting agreements in recent years in order to reduce potential for transmitting economic shocks through interbank markets. This paper provides a model of an interbank payment market and shows that one sideeffect of...