Theory of Bank Efficiency and Bank Risk

Yong Tan
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Yong Tan: University of Huddersfield Business School

Chapter 3 in Investigating the Performance of Chinese Banks: Efficiency and Risk Features, 2016, pp 53-77 from Palgrave Macmillan

Abstract: Abstract Before proceeding to the estimation of bank efficiency, bank risk and the impact of risk on efficiency in the Chinese banking industry, it is essential to understand relevant theories. This chapter will firstly discuss each of the theories of technical efficiency, cost efficiency, revenue efficiency and profit efficiency, using diagrams. This chapter will also discuss the theories in terms of the methods used to estimate efficiency, including parametric method as well as non-parametric method. Theories related to different risk indicators used in the current book including credit risk, liquidity risk, security risk as well as capital risk and insolvency risk will be discussed in this chapter. Finally, the conclusion will be provided.

Keywords: Theories; Efficiency; Bank risk; Parametric; Non-parametric (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1057/978-1-137-49376-7_3

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