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Bank profit efficiency and financial consumer protection policies

Chrysovalantis Gaganis (), Emilios Galariotis, Fotios Pasiouras and Christos Staikouras

Journal of Business Research, 2020, vol. 118, issue C, 98-116

Abstract: Over the last decade, financial consumer protection policies have attracted a lot of attention among policy makers. However, empirical evidence on the impact of such policies on bank efficiency is nonexistent. At the same time, important differences on the instruments used to conduct prudential and financial consumer supervision do not permit the generalization of the findings of studies that focus on the former. The present study uses a sample of 2413 banks from 79 countries to examine, for the first time in the literature, whether and if so how financial consumer protection policies influence bank profit efficiency around the globe. Considering policies related to disclosures to customers, fair treatment, dispute resolution, and the power of the financial consumer protection supervisory agency, our results show that more regulatory requirements decrease bank efficiency. The results are robust to various tests.

Keywords: Consumer protection; Regulations; Banks; Efficiency (search for similar items in EconPapers)
JEL-codes: G28 K22 (search for similar items in EconPapers)
Date: 2020
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Working Paper: Bank Profit Efficiency and Financial Consumer Protection Policies (2020)
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DOI: 10.1016/j.jbusres.2020.06.033

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