Bank Efficiency during the Current Economic Crisis: An International Comparison

Adrian Babin ()
Additional contact information
Adrian Babin: Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic, http://ies.fsv.cuni.cz/

No 2013/08, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: This paper uses a Latent Class Stochastic Frontier Approach to factor out the heterogeneity in the data and to provide evidence on the existence of different bank technologies in international banking with different response schedules to external shocks and diverse constraints. We use an unbalanced panel of 756 banks from 77 countries during 2005-2010 for this purpose. Using bank level structural variables we determine four different profit and cost banking technologies in the data. Further analysis indicates heterogeneity not only among the level of profit and cost efficiency, but also regarding the response of banks to the crisis. Interestingly, we find that banks from the same class but from different regions had a different efficiency evolution over the period. Moreover, we document the existence of banks that are more predisposed to be efficient in certain regions than in others. Finally, we document that banks have several potential options for rebalancing the balance sheet for improving the efficiency, albeit some of these strategies have opposite effects on the profit and cost efficiency.

Keywords: efficiency; heterogeneity; crisis; latent classes (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Pages: 40pages
Date: 2013-07, Revised 2013-07
New Economics Papers: this item is included in nep-ban, nep-cse and nep-eff
References: Add references at CitEc
Citations:

Downloads: (external link)
http://ies.fsv.cuni.cz/sci/publication/show/id/4855/lang/cs
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://ies.fsv.cuni.cz/sci/publication/show/id/4855/lang/cs [301 Moved Permanently]--> https://ies.fsv.cuni.cz/sci/publication/show/id/4855/lang/cs)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fau:wpaper:wp2013_08

Access Statistics for this paper

More papers in Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Natalie Svarcova ().