Hostname: page-component-586b7cd67f-t7czq Total loading time: 0 Render date: 2024-11-24T22:59:50.478Z Has data issue: false hasContentIssue false
  • English
  • Français

Capital Accumulation and Deposit Pricing in Mutual Financial Institutions

Published online by Cambridge University Press:  06 April 2009

Sudhakar D. Deshmukh ,
Stuart I. Greenbaum  and
Anjan V. Thakor
Get access Rights & Permissions [Opens in a new window]

Extract

This paper presents a multiperiod model of a deposit-type mutual financial institution and analyzes the manager's capital accumulation and deposit pricing decisions under uncertainty. The model is meant to describe a mutual savings and loan association (SLA) or a credit union in which there are no stockholders and nominal ownership is widely diffused (see [12] and [14]). The resulting paucity of monitoring gives rise to an agency problem (see [13]) in which the manager maximizes his multiperiod expected discounted utility with minimal intervention from nominal owners.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 17 , Issue 5 , December 1982 , pp. 705 - 725
Copyright
Copyright © School of Business Administration, University of Washington 1982

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

[1]Baltensperger, E. “Alternative Approaches to the Theory of the Banking Firm.” Journal of Monetary Economies, Vol. 6 (01 1980), pp. 1–38.CrossRefGoogle Scholar
[2]Edwards, F. R. “Managerial Objectives in Regulated Industries: Expense Preference Behavior in Banking.” Journal of Political Economy, Vol. 85 (10 1977), PP. 147–162.CrossRefGoogle Scholar
[3]Fevang, H. J. “Bankfortefølde Oglikviditet.” Unpublished manuscript, Norges Handelshøyskole (1972).Google Scholar
[4]Goldfeld, S. M., and Jaffee, D. M.. “The Determinants of Deposit Rate Setting by Savings and Loan Associations.” Journal of Finance, Vol. 25 (06 1970), pp. 615–632.Google Scholar
[5]Hakansson, N. “Optimal Investment and Consumption Strategies under Risk for a Class of Utility Functions.” Econometrica, Vol. 38 (09 1970). pp. 587–607.CrossRefGoogle Scholar
[6]Halloran, J. C. “A Note on the Impact of FHLB Advances on the Cost and Availability of Funds at S&Ls.” Journal of Finance, Vol. 34 (12 1979), pp. 1255–1261.CrossRefGoogle Scholar
[7]Hannan, T. H. “Expense-Preference Behavior in Banking: A Reexamination.” Journal of Political Economy, Vol. 87 (02 1979), pp. 891–895.CrossRefGoogle Scholar
[8]Hannan, T. H., and Mavinga, F.. “Expense Preference and Managerial Control The Case of the Banking Firm.” Bell Journal of Economics, Vol. 11 (Autumn 1980), pp. 671–682.CrossRefGoogle Scholar
[9]Harris, M., and Raviv, A.. “Optimal Incentive Contracts with Imperfect Information.” Journal of Economic Theory, Vol. 20 (04 1979), pp. 231–259.CrossRefGoogle Scholar
[10]Hester, D. “Ownership and Behavior in the Savings and Loan Industry.” In Conversions of Mutual S&Ls to Stock Form: Legal and Economic Issues. Federal Home Loan Bank Board, Washington, DC (1967).Google Scholar
[11]Hester, D. “Stock and Mutual Associations in the Savings and Loan Industry.” Federal Home Loan Bank Board, Washington, DC (1968).Google Scholar
[12]Herman, E. S. “Conflicts of Interest in the Savings and Loan Industry.” Study of the Savings and Loan Industry, Friend, I., ed. Federal Home Loan Bank Board, Washington, DC (1969), pp. 763–971.Google Scholar
[13]Jensen, M. C., and Meckling, W. H.. “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics, Vol. 3 (10 1976), pp. 305–360.CrossRefGoogle Scholar
[14]Jolivet, V. “Control of Savings and Loan Associations.” Journal of Financial and Quantitative Analysis, Vol. 1 (12 1966), pp. 58–70.CrossRefGoogle Scholar
[15]Klein, M. “A Theory of the Banking Firm.” Journal of Money, Credit, and Banking, Vol. 3 (05 1971), pp. 205–218.CrossRefGoogle Scholar
[16]Lapp, J. S. “The Determination of Savings and Loan Association Deposit Rates in the Absence of Rate Ceilings: A Cross-Section Approach.” Journal of Finance, Vol. 33 (03 1978), pp. 215–230.Google Scholar
[17]Maisel, S.Risk and Capital Adequacy in Commercial Banks. Chicago, IL: University of Chicago Press (1981).Google Scholar
[18]Nichols, A. “Stock vs. Mutual Savings and Loan Associations: Some Evidence.” American Economic Review, Vol. 57 (1967), pp. 337–346.Google Scholar
[19]Nichols, A.. Management and Control in the Mutual Savings and Loan Association. Lexington, MA: D. C. Heath (1972).Google Scholar
[20]Niehans, J.The Theory of Money, Baltimore, MD: The Johns Hopkins University Press.CrossRefGoogle Scholar
[21]Phelps, E. “The Accumulation of Risky Capital: A Sequential Utility Analysis.” Econometrica, Vol. 30 (10 1962), pp. 729”743.CrossRefGoogle Scholar
[22]Pringle, J. “The Imperfect Markets Model of Commercial Bank Financial Management.” Journal of Financial and Quantitative Analysis, Vol. 9 (01 1974), pp. 69–87.CrossRefGoogle Scholar
[23]Pyle, D. H. “Descriptive Theories of Financial Institutions under Uncertainty.” Journal of Financial and Quantitative Analysis, Vol. 7 (12 1972), pp. 209–229.CrossRefGoogle Scholar
[24]Ross, S. A. “The Economic Theory of Agency: The Principal's Problem.” American Economic Review, Vol. 63 (05 1973), pp. 134–139.Google Scholar
[25]Stiglitz, J., and Weiss, A.. “Credit Rationing in Markets with Imperfect Information.” American Economic Review, Vol. 71 (06 1981), pp. 393–410.Google Scholar
[26]Stigum, M. L. “Some Further Implications of Profit Maximization by a Savings and Loan Association.” Journal of Finance, Vol. 31 (12 1976), pp. 1405–1426.CrossRefGoogle Scholar
[27]Taggart, R. A., and Greenbaum, S. I.. “Bank Capital and Public Regulation.” Journal of Money, Credit, and Banking, Vol. 10 (05 1978), pp. 158–169.CrossRefGoogle Scholar
[28]Verbrugge, J. A., and Goldstein, S. J.. “Risk, Return and Managerial Objectives: Some Evidence from the Savings and Loan Industry.” Journal of Financial Research (forthcoming).Google Scholar
[29]Verbrugge, J. A., and Jahera, J. S. Jr “Expense-Preference Behavior in the Savings and Loan Industry.” Journal of Money, Credit, and Banking, Vol. 13 (11 1981), pp. 465–476.CrossRefGoogle Scholar