Banking Operational Cost in the Balkan Region under a Quadratic Loss Function

Emmanuel Mamatzakis

Economics Bulletin, 2009, vol. 29, issue 2, 883-890

Abstract: This paper presents of theoretical specification of a quadratic loss function based on forward looking rational expectations to model the underlying dynamics of operational performance of the banking industry. As an empirical application we examine the determinants of total operating costs within a dynamic panel analysis in the Balkan region that is the South East Europe (SEE) over the period 1998-2005. Results show that operating performance is positively related to loan quality and the asset size or the bank's market share, whilst the speed of adjustment to the long run operational cost is substantial in magnitude.

JEL-codes: D2 G2 (search for similar items in EconPapers)
Date: 2009-05-06
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Working Paper: Banking Operational Cost in the Balkan Region under a Quadratic Loss Function (2010)
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