01877cas a2200253 a 4500 AALejournalIMF004642 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451865660 1018-5941 BD-DhAAL BD-DhAAL Cihak, Martin. Cooperative Banks and Financial Stability / Martin Cihak, Heiko Hesse. Washington, D.C. : International Monetary Fund, 2007. 1 online resource (36 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Cooperative banks are an important, and growing, part of many financial systems. This paper empirically analyzes the role of cooperative banks in financial stability. Contrary to some suggestions in the literature, we find that cooperative banks are more stable than commercial banks. This finding is due to the lower volatility of the cooperative banks' returns, which more than offsets their lower profitability and capitalization. This is most likely due to cooperative banks' ability to use customer surplus as a cushion in weaker periods. We also find that in systems with a high presence of cooperative banks, weak commercial banks are less stable than they would be otherwise. The overall impact of a higher cooperative presence on bank stability is positive on average but insignificant in some specifications. Mode of access: Internet Hesse, Heiko. IMF Working Papers; Working Paper ; No. 2007/002 Full text available on IMF http://elibrary.imf.org/view/journals/001/2007/002/001.2007.issue-002-en.xml IMF e-Library