What is it about?

This study examines Western European banks' funding stability. Banks are divided into three categories by bank ownership type; the ownership types in this study are commercial banks, cooperative banks and savings banks. Three sources of stable bank funding are investigated: customer deposits, equity, and long-term liabilities. Furthermore, the sum of these funding components is used to examine banks' funding stability. A special focus is on the temporal evolution of these funding types. The results show that commercial banks’ funding became much more stable in the period 2005–2017. However, that funding remains, on average, less stable than does cooperative and savings banks’ funding. In addition, funding stability has remained at the pre-crisis level in cooperative and savings banks, despite a steep dip in cooperative banks’ funding stability during the sovereign debt crisis. Furthermore, banks substantially replaced financing from long-term liabilities with customer deposits and equity after the financial crisis.

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Why is it important?

Until today, the literature lacked a study that investigates the evolution of Western European banks' funding stability after the financial crisis. Thus, this study fills a gap in the literature. The sample period includes the economic boom during the lead-up to the crisis, the 2008-2009 financial crisis and the sovereign crisis. On top of these, the sample period includes the recovery years from 2014-2017. Therefore, this study gives an insight into the evolution of funding stability before, during and after the financial crisis.


This is the third and the last essay that I publish from my PhD thesis. My thesis includes four essays on financial stability and bank ownership type. I am very proud that I was given the chance to publish the third essay in Annals of Public and Cooperative Economics. Moreover, I wish to thank two anonymous referees. Similarly, I am grateful for everyone who commented my study in seminars and workshops.

Dr. Jari-Mikko Meriläinen
Jyvaskylan Yliopisto

Read the Original

This page is a summary of: Bank ownership type and temporal evolution of long-term bank funding in the period 2005-2017, Annals of Public and Cooperative Economics, March 2020, Wiley,
DOI: 10.1111/apce.12266.
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