Please use this identifier to cite or link to this item: http://buratest.brunel.ac.uk/handle/2438/8993
Title: Bank supervision, regulation, and efficiency: Evidence from the European Union
Authors: Chortareas, GE
Girardone, C
Ventouri, A
Keywords: Bank Performance;Regulation and Supervision;European Banks;DEA;Truncated Regression;Bootstrap
Issue Date: 2012
Publisher: Elsevier
Citation: Journal of Financial Stability, 8(4), 292 - 302, 2012
Abstract: This paper investigates the dynamics between key regulatory and supervisory policies and various aspects of commercial bank efficiency and performance for a sample of 22 EU countries over 2000–2008. In the first stage of the analysis we measure efficiency by employing the Data Envelopment Analysis (DEA) technique. In addition, we employ two distinct accounting ratios to capture the costs of intermediation (net interest margin) and cost effectiveness (cost-to-income ratio). Our regression framework includes truncated regressions and generalized linear models. Moreover, we carry out a sensitivity analysis for robustness using a fractional logit estimator. Our results show that strengthening capital restrictions and official supervisory powers can improve the efficient operations of banks. Evidence also indicates that interventionist supervisory and regulatory policies such as private sector monitoring and restricting bank activities can result in higher bank inefficiency levels. Finally, the evidence produced suggests that the beneficial effects of capital restrictions and official supervisory powers (interventionist supervisory and regulatory policies) on bank efficiency are more pronounced in countries with higher quality institutions.
Description: This is the post-print version of the final paper published in Journal of Financial Stability. The published article is available from the link below. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. Copyright @ 2011 Elsevier B.V.
URI: http://www.sciencedirect.com/science/article/pii/S1572308911000593
http://bura.brunel.ac.uk/handle/2438/8993
DOI: http://dx.doi.org/10.1016/j.jfs.2011.12.001
ISSN: 1572-3089
Appears in Collections:Economics and Finance
Dept of Economics and Finance Research Papers

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