The impact of regulatory reform on the portfolio performance of Australian credit unions

Deborah Ralston

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Abstract

This paper applies a portfolio approach to examine the effectiveness of the Financial Institutions (FI) Code (1992) in achieving the twin regulatory objectives of stability and efficiency in Australian credit unions. A model is developed to examine the allocation of credit union portfolios in unregulated and regulation-constrained environments. The impact of regulatory constrainsts on portfolio performance prior to and following the introduction of the FI code is thus assessed. The paper concludes that, overall, the FI Code increased both the stability and the allocative efficiency of credit unions over that of previous regulatory regimes.

Original languageEnglish
Pages (from-to)167-182
Number of pages16
JournalEconomic Record
Volume77
Issue number237
DOIs
Publication statusPublished - Jun 2001
Externally publishedYes

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