Cooperative banks, the internet and market discipline. Issue 2 (December 2016)

• Record Type: Journal Article
• Authors: Kozłowski, Łukasz
• Is Part Of: Journal of co-operative organization and management. Volume 4:Issue 2(2016:Dec.)
• Page Start: 76
• Page End: 84
• Publication Date: 2016-12
• Subjects: G21 -- G28; Cooperative banks -- Market discipline -- the internet; Cooperative societies -- Management -- Periodicals; Cooperative societies -- Periodicals; Cooperative Behavior -- Periodicals; Cooperative societies; Cooperative societies -- Management; Periodicals; 658.04705
• DOI: 10.1016/j.jcom.2016.08.002
• Languages: English
• ISSNs: 2213-297X

Abstract

Highlights: I examine market discipline mechanisms at Polish cooperative banks. Depositors distinguish between less and more risky cooperative banks. A bank's internet activity improves a bank's transparency. Adoption of online banking systems stimulates deposit mobility. Banks that are more active on the internet face stronger market discipline. Abstract: This paper analyses market discipline mechanisms at Polish cooperative banks within the special context of their internet activity. I argue that cooperative banks' depositors punish more risky banks for their bad behavior by withdrawing deposits. The findings demonstrate that a greater emphasis could be placed on stimulating market discipline at cooperative banks because a large number of these institutions hampers their regulatory discipline. To strengthen the market discipline mechanisms, regulators should promote internet activity at cooperative banks and among their depositors, as well as require banks to present financial information on their websites and to adopt online banking systems.