The diversification and financial performance of US credit unions

For US credit unions, revenue from non-interest sources has increased significantly in recent years. We investigate the impact of revenue diversification on financial performance for the period 1993–2004. The impact of a change in strategy that alters the share of non-interest income is decomposed into a direct exposure effect, reflecting the difference between interest and non-interest bearing activities, and an indirect exposure effect which reflects the effect of the institution’s own degree of diversification. On both risk-adjusted and unadjusted returns measures, a positive direct exposure effect is outweighed by a negative indirect exposure effect for all but the largest credit unions. This may imply that similar diversification strategies are not appropriate for large and small credit unions. Small credit unions should eschew diversification and continue to operate as simple savings and loan institutions, while large credit unions should be encouraged to exploit new product opportunities around their core expertise.

Which Credit Unions are Acquired?

Recent years have witnessed a wave of consolidation amongst US credit unions. Through hazard function estimations, this paper identifies the determinants of acquisition for credit unions during the period 2001-06. The hazard of acquisition is inversely related to both asset size and profitability, and positively related to liquidity. Growth-constrained credit unions are less attractive acquisition targets. Institutions with low capitalization and those with small loans portfolios relative to total assets are susceptible to acquisition. The investigation presents unique empirical evidence of a link between technological capability and the hazard of acquisition. During the period 2001-06, when there was sustained growth in the use of internet technology, credit unions with no website were at the highest risk of acquisition. © Springer Science + Business Media, LLC 2009.

Credit Unions: A Theoretical and Empirical Overview

In 2009 there were over 49,330 credit unions across 98 countries with more than 184 million members and approximately $1,354 billion in assets. There is a great diversity within the credit union movement across these countries. This reflects the various economic, historic and cultural contexts within which credit unions operate. This paper traces the evolution of the credit union movement. It examines credit union objectives, and considers issues relating to efficiency, technology adoption, product diversification, merger, failure and demutualization. The regulatory environment within which credit unions operate is also explored under the themes of interest rate regulation, common bond requirements, taxation, deposit insurance and capital regulation. The overview also considers demutualization and the costs and benefits to credit unions of altering their organizational form.

Cooperative bank efficiency in Japan: a parametric distance function analysis

This study examines the relative performance of Japanese cooperative banks between 1998 and 2009, explicitly modeling non-performing loans as an undesirable output. Three key findings emerge. First, the sector is characterized by increasing returns to scale which supports the ongoing amalgamation process within the sector. Second, although restricted in product offerings, markets and their membership base, Japanese cooperatives secured both technical progress (a positive shift in the frontier) and a decrease in technical inefficiency (distance from the frontier). Third, the analysis highlighted that regulatory pressure to reduce non-performing loans will have an adverse impact on both output and performance. 

US Credit Unions: Survival, Consolidation and Growth

This study uses hazard function estimations and time-series and cross-sectional growth regressions to examine the impact of exit through merger and acquisition (M&A) or failure, and internally-generated growth, on the firm-size distribution within the US credit union sector. Consolidation through M&A was the principal cause of a reduction in the number of credit unions, but impact on concentration was small. Divergence between the average internally-generated growth of smaller and larger credit unions was the principal driver of the rise in concentration.

Corporate Governance in Canadian and US Credit Unions

This report, a collaborative effort between the Filene Research Institute and the Credit Union Central of Canada, with participation from the Desjardins Group, follows on two recent governance projects: Tracking the Relationship Between Credit Union Governance and Performance and a three-part series by Professor Robert Hoel about how boards can add more value. Beyond these, the academic literature of corporate governance is well developed, so this study includes an in-depth review of financial institution governance research and calls out the differences between credit unions and other firms. Also, because surveys can only go so far in teasing out insights, the authors followed up with a dozen interviews with credit unions of all sizes across all three major North American credit union systems.

Because the report is survey-based, large swaths of the findings compare major and minor details of different (and often not-so-different) approaches to governance in the three systems and among differently sized credit unions. From those comparisons, some interesting differences emerge. For example, as a federated system, Desjardins excels at some aspects of board development and system governance in ways that the more atomized US and Canadian credit union systems do not.

Cheetahs, Acinonyx jubatus, balance turn capacity with pace when chasing prey

Predator–prey interactions are fundamental in the evolution and structure of ecological communities. Our understanding, however, of the strategies used in pursuit and evasion remains limited. Here, we report on the hunting dynamics of the world's fastest land animal, the cheetah, Acinonyx jubatus. Using miniaturized data loggers, we recorded fine-scale movement, speed and acceleration of free-ranging cheetahs to measure how hunting dynamics relate to chasing different sized prey. Cheetahs attained hunting speeds of up to 18.94 m s-1 and accelerated up to 7.5 m s-2 with greatest angular velocities achieved during the terminal phase of the hunt. The interplay between forward and lateral acceleration during chases showed that the total forces involved in speed changes and turning were approximately constant over time but varied with prey type. Thus, rather than a simple maximum speed chase, cheetahs first accelerate to decrease the distance to their prey, before reducing speed 5–8 s from the end of the hunt, so as to facilitate rapid turns to match prey escape tactics, varying the precise strategy according to prey species. Predator and prey thus pit a fine balance of speed against manoeuvring capability in a race for survival.

Shared Pseudomonas aeruginosa genotypes are common in Australian cystic fibrosis centres

Recent molecular-typing studies suggest cross-infection as one of the potential acquisition pathways for Pseudomonas aeruginosa in patients with cystic fibrosis (CF). In Australia, there is only limited evidence of unrelated patients sharing indistinguishable P. aeruginosa strains. We therefore examined the point-prevalence, distribution, diversity and clinical impact of P. aeruginosa strains in Australian CF patients nationally. 983 patients attending 18 Australian CF centres provided 2887 sputum P. aeruginosa isolates for genotyping by enterobacterial repetitive intergenic consensus-PCR assays with confirmation by multilocus sequence typing. Demographic and clinical details were recorded for each participant. Overall, 610 (62%) patients harboured at least one of 38 shared genotypes. Most shared strains were in small patient clusters from a limited number of centres. However, the two predominant genotypes, AUST-01 and AUST-02, were widely dispersed, being detected in 220 (22%) and 173 (18%) patients attending 17 and 16 centres, respectively. AUST-01 was associated with significantly greater treatment requirements than unique P. aeruginosa strains. Multiple clusters of shared P. aeruginosa strains are common in Australian CF centres. At least one of the predominant and widespread genotypes is associated with increased healthcare utilisation. Longitudinal studies are now needed to determine the infection control implications of these findings.

The Size Distribution of US Banks and Credit Unions

This study examines the firm size distribution of US banks and credit unions. A truncated lognormal distribution describes the size distribution, measured using assets data, of a large population of small, community-based commercial banks. The size distribution of a smaller but increasingly dominant cohort of large banks, which operate a high-volume low-cost retail banking model, exhibits power-law behaviour. There is a progressive increase in skewness over time, and Zipf’s Law is rejected as a descriptor of the size distribution in the upper tail. By contrast, the asset size distribution of the population of credit unions conforms closely to the lognormal distribution.

Regulatory Change and Capital Adjustment of US Credit Unions

We investigate the determinants of US credit union capital-to-assets ratios, before and after the implementation of the current capital adequacy regulatory framework in 2000. Capitalization varies pro-cyclically, and until the financial crisis credit unions classified as adequately capitalized or below followed a faster adjustment path than well capitalized credit unions. This pattern was reversed, however, in the aftermath of the crisis. The introduction of the PCA regulatory regime achieved a reduction in the proportion of credit unions classified as adequately capitalized or below that continued until the onset of the crisis. Since the crisis, the speed of recovery of credit unions in this category following an adverse capitalization shock was sharply reduced.

Mass enhances speed but diminishes turn capacity in terrestrial pursuit predators

The dynamics of predator-prey pursuit appears complex, making the development of a framework explaining predator and prey strategies problematic. We develop a model for terrestrial, cursorial predators to examine how animal mass modulates predator and prey trajectories and affects best strategies for both parties. We incorporated the maximum speed-mass relationship with an explanation of why larger animals should have greater turn radii; the forces needed to turn scale linearly with mass whereas the maximum forces an animal can exert scale to a 2/3 power law. This clarifies why in a meta-analysis, we found a preponderance of predator/prey mass ratios that minimized the turn radii of predators compared to their prey. It also explained why acceleration data from wild cheetahs pursuing different prey showed different cornering behaviour with prey type. The outcome of predator prey pursuits thus depends critically on mass effects and the ability of animals to time turns precisely.

'Regina v John Terry': The Discursive Construction of an Alleged Racist Event

This article explores the conformation in discourse of a verbal exchange and its subsequent mediatised and legal ramifications. The event concerns an allegedly racist insult directed by high profile English professional footballer John Terry towards another player, Anton Ferdinand, during a televised match in October 2011. The substance of Terry’s utterance, which included the noun phrase ‘fucking black cunt’, was found by a Chief Magistrate not to be a racist insult, although the fact that these actual words were framed within the utterance was not in dispute. The upshot of this ruling was that Terry was acquitted of a racially aggravated public order offence. A subsequent investigation by the regulatory commission of the English Football Association (FA) ruled, almost a year after the event, that Terry was guilty of racially abusing Ferdinand. Terry was banned for four matches and fined £220,000.

It is our contention that this event, played out in legal rulings, social media and print and broadcast media, constitutes a complex web of linguistic structures and strategies in discourse, and as such lends itself well to analysis with a broad range of tools from pragmatics, discourse analysis and cognitive linguistics. Amongst other things, such an analysis can help explain the seemingly anomalous - even contradictory - position adopted in the legal ruling with regard to the speech act status of ‘fucking black cunt’; namely, that the racist content of the utterance was not contested but that the speaker was found not to have issued a racist insult. Over its course, the article addresses this broader issue by making reference to the systemic-functional interpersonal function of language, particularly to the concepts of modality, polarity and modalisation. It also draws on models of verbal irony from linguistic pragmatics, notably from the theory of irony as echoic mention (c.f. Sperber and Wilson, 1981; Wilson and Sperber, 1992). Furthermore, the article makes use of the cognitive-linguistic framework, Text World Theory (c.f. Gavins, 2007; Werth, 1999) to examine the discourse positions occupied by key actors and adapts, from cognitive poetics, the theory of mind-modelling (c.f. Stockwell, 2009) to explore the conceptual means through which these actors discursively negotiate the event.

It is argued that the pragmatic and cognitive strategies that frame the entire incident go a long way towards mitigating the impact of so ostensibly stark an act of racial abuse. Moreover, it is suggested here that the reconciliation of Terry’s action was a result of the confluence of strategies of discourse with relations of power as embodied by the media, the law and perceptions of nationhood embraced by contemporary football culture. It is further proposed that the outcome of this episode, where the FA was put in the spotlight, and where both the conflict and its key antagonists were ‘intranational’, was strongly impelled by the institution of English football and its governing body both to reproduce and maintain social, cultural and ethnic cohesion and to avoid any sense that the event featured a discernable ‘out-group’.