Bank and Credit Union Business Models in the United States

Bank and Credit Union Business Models in the United States, 2017, ISBN: 978-0-9949169-2-1

112 Pages Posted: 31 Jan 2018

See all articles by Rym Ayadi

Rym Ayadi

HEC Montreal

Michel Keoula

Bielefeld University - Department of Business Administration and Economics

Willem Pieter De Groen

Centre for European Policy Studies (CEPS)

Walid Mathlouthi

Independent

Ibtihel Sassi

Independent

Date Written: November 30, 2017

Abstract

This study comes in response to the continuing evolution of market structures and regulatory overhaul since the financial crisis of 2007-2009 in the US. The banking sector has largely suffered after the collapse of Lehman Brothers in September 2008. The initial context of decades of deregulation has been followed by the Dodd-Frank Act to respond to the overly damaging 2007-2009 global financial crisis, with the aim of safeguarding financial stability and putting an end to government bailouts.

This first investigation into the bank and credit union business models for the United States, offers an extensive insight into 10,352 banks and 10,392 credit unions, which respectively account for almost all total banking assets of the country and more than 80% of the total assets of credit unions. Using regulatory data from 2000 to 2014, the two samples of 108,226 bank-year observations and 115,516 credit-union-year observations are each clustered into distinct bank and credit union business models, using a novel definition and applying a robust clustering methodology. The definition uses the activity and funding profiles of a bank or a credit union based on balance sheet indicators.

Four bank business models and three credit union business models are identified. The study proceeds then by thorough assessments of the interaction between business models and size, as well as the migration, financial performance, contribution to the real economy, risk and response to regulation of US banks and credit unions, using a rich palette of indicators.

Keywords: Bank business models, bank regulation, bank structures, financial crisis

JEL Classification: G21, G01, G28

Suggested Citation

Ayadi, Rym and Keoula, Michel and Pieter De Groen, Willem and Mathlouthi, Walid and Sassi, Ibtihel, Bank and Credit Union Business Models in the United States (November 30, 2017). Bank and Credit Union Business Models in the United States, 2017, ISBN: 978-0-9949169-2-1. Available at SSRN: https://ssrn.com/abstract=3107931

Rym Ayadi (Contact Author)

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada

Michel Keoula

Bielefeld University - Department of Business Administration and Economics ( email )

P.O. Box 100131
D-33501 Bielefeld, NRW 33501
Germany

Willem Pieter De Groen

Centre for European Policy Studies (CEPS)

1 Place du Congres, 1000
Brussels, 1000
Belgium

Walid Mathlouthi

Independent

No Address Available
United States

Ibtihel Sassi

Independent

No Address Available
United States

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