IMF BANK-RESTRUCTURING EFFICIENCY OUTCOMES:EVIDENCE FROM EAST ASIA

Mohamed Ariff () and Luc Can
Additional contact information
Luc Can: Boston University

No CARF-F-128, CARF F-Series from Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo

Abstract: This paper reports new findings for the first time on bank efficiency over the pre- and post-IMF-restructuring periods for East Asia using the DEA and regression models. Bank closures that followed the IMF interventions are economically justified; but mergers and acquisitions experience short-term efficiency losses. Recapitalization and then re-privatization of bad banks have led to efficiency improvements, but still increased government ownership. Ease of entry has resulted in more foreign bank participation with improved performance; further spurts in improvements, however, may take longer time. These findings advocate bank restructuring during the crisis; but well-designed measures are vital to ensure its success. Bank mergers and acquisitions need to be scrutinized. Privatization, particularly with strategic foreign ownership, of domestic banks which should be further encouraged. To reap the potential benefits of such foreign participation, stronger economic reforms of the host countries should be further pursued.

Pages: 40 pages
Date: 2008-08
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Citations: View citations in EconPapers (2)

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https://www.carf.e.u-tokyo.ac.jp/old/pdf/workingpaper/fseries/132.pdf (application/pdf)

Related works:
Journal Article: IMF Bank-Restructuring Efficiency Outcomes: Evidence from East Asia (2009)
Working Paper: IMF Bank-Restructuring Efficiency Outcomes: Evidence from East Asia (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cfi:fseres:cf128

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