Financial crisis and bank efficiency: An empirical study of European banks

Alin Marius Andrieș and Silviu Gabriel Ursu

Economic Research-Ekonomska Istraživanja, 2016, vol. 29, issue 1, 485-497

Abstract: This article uses the frontier technique to highlight the differences in the impact of the global financial crisis on the efficiency of 783 commercial banks from the EU during the period 2004–2010. We emphasise the distinctions between large and small banks, publicly traded and privately held banks, as well as the statuses of banks’ country of origin, especially for the year in which they joined the EU and held eurozone membership. Our results show that the crisis has a significant and positive impact on both the cost and profit inefficiencies of the commercial banks from the EU, and that this impact is higher on eurozone banks. In terms of cost efficiency, the most affected by the crisis are the large publicly traded banks, operating in old members of the EU. With regard to the profit inefficiency, the global financial crisis seems to have had a lower impact on the large public banks.

Date: 2016
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DOI: 10.1080/1331677X.2016.1175725

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