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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
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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

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