Mitja Stefancic holds an MPhil in “Modern Society and Global Transformations” from the University of Cambridge and a BA in Social Sciences from the University of Essex. His PhD research focuses on the corporate governance and regulation of cooperative banks. He presented his research endeavours at scientific conferences such as EURICSE’s conference on cooperative banking and sustainable finance in Trento, Italy; the ICA 2014 Research conference in Pula, Croatia; and at the 2013 “Potential and Limits Of Social Solidarity” conference in Geneva, Switzerland. His scientific contributions are published in journals such as Studi Economici, the Journal of Entrepreneurial & Organizational Diversity, the International Business & Research Journal, and has a forthcoming paper on coop banks in the ICA Review of International Co-Operation.
Executive Summary :
This paper investigates the performance of different types of Italian banks before and during the recent credit crisis. Specifically, it attempts to assess whether cooperative banks performed differently from commercial banks during 2005-2012 in terms of return on average assets (ROAA), cost efficiency and loan quality, which are used as indicators of banks’ profitability, efficiency and soundness. Theoretically, cooperative banks should follow more conservative business strategies and care more for stakeholders in comparison to commercial banks. These banks are customeroriented, and are particularly efficient in maintaining long-lasting relationships with their members and customers. Such characteristics should mean that cooperative banks were less exposed to the shock of the crisis, but they would also likely have been less able to adjust to the shock. Using a sample of 594 banks, pooled OLS and a fixed effects estimator (when possible), it can be observed that, overall, cooperative banks perform better than other banks. Furthermore, the quality of loans deteriorated less in these banks than in others during the credit crisis, while no significant differences are observed in terms of ROAA and cost efficiency between these and other banks.