Chortareas, Georgios E and Girardone, Claudia and Ventouri, Alexia (2012) Bank supervision, regulation, and efficiency: Evidence from the European Union. Journal of Financial Stability, 8 (4). pp. 292-302. DOI https://doi.org/10.1016/j.jfs.2011.12.001
Chortareas, Georgios E and Girardone, Claudia and Ventouri, Alexia (2012) Bank supervision, regulation, and efficiency: Evidence from the European Union. Journal of Financial Stability, 8 (4). pp. 292-302. DOI https://doi.org/10.1016/j.jfs.2011.12.001
Chortareas, Georgios E and Girardone, Claudia and Ventouri, Alexia (2012) Bank supervision, regulation, and efficiency: Evidence from the European Union. Journal of Financial Stability, 8 (4). pp. 292-302. DOI https://doi.org/10.1016/j.jfs.2011.12.001
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. © 2011 Elsevier B.V.
Item Type: | Article |
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Uncontrolled Keywords: | Bank performance; Regulation and supervision; European Banks; DEA; Truncated regression; Bootstrap |
Subjects: | H Social Sciences > HG Finance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 03 Aug 2013 08:25 |
Last Modified: | 30 Oct 2024 19:50 |
URI: | http://repository.essex.ac.uk/id/eprint/7207 |