Financial Regulation in Credit Unions: Stakeholder Perceptions and Implications for Financial Performance

This study compares regulatory approaches, financial performance and stakeholder perceptions of financial regulation across the credit union sectors of the Republic of Ireland and Northern Ireland over the period 2019–2024. It makes four contributions. First, perceptions of the appropriateness of financial regulation are explained by regulatory flexibility, rule enforcement and the nature and extent of collaboration in regulatory design. Second, financial regulation design is influenced by the importance of the sector within the overall financial system, the financial performance of the sector and the financial regulator’s strategic view of the social and economic role of the credit union sector within the national financial system. Third, the financial regulator is the dominant stakeholder in regulatory design, and this ultimately determines the boundaries of credit union business model development. Fourth, macro-level evidence indicates that regulatory inflexibility adversely affects financial performance.