Bank Efficiency: Evidence from a Panel of European Banks

The goal of this paper is to investigate the efficiency of the banking systems in eight European countries over the period 1994 to 2008 by using the production frontier methodology. The paper shows that risk factors along with a size variable should be taken into account, otherwise inefficiency tends to be overstated.Bank efficiency, Stochastic frontier, European banks

Bank efficiency: Evidence from a panel of European banks

The goal of this paper is to investigate the efficiency of the banking systems in eight European countries over the period 1994 to 2008 by using the production frontier methodology. The paper shows that risk factors along with a size variable should be taken into account, otherwise inefficiency tends to be overstated

Δοκίμια αναφερόμενα στο κανάλι τραπεζικού δανεισμού

This chapter examines two issues: First, it investigates the efficiency of the banking system in six European countries spanning the period of 1994 to 2008. The methodology used is the profit frontier methodology, following the approach suggested in Mester (1996), who indicates that financial capital should be taken into account. Furthermore total assets consist an additional variable that controls for size and is included in the model as well. Second, the chapter examines the impact of efficiency on monetary policy, through the bank lending channel, using the GMM estimator methodology suggested in Arellano and Bond (1991). The results indicate that when efficiency is explicitly included in the model, it weakens the operation of the bank lending channel

The bank lending channel and monetary policy rules for Eurozone banks: further extensions

The monetary authorities affect macroeconomic activity through various channels of influence. This paper examines the bank lending channel, which considers how central bank actions affect the loan supply through its main indicator of policy, the real short-term interest rate. This paper employs the endogenously determined target interest rate, emanating from the European Central Bank’s monetary policy rule, to examine the operation of the bank lending channel. Furthermore, it examines whether different bank-specific characteristics affect how Eurozone banks react to monetary shocks. That is, do sounder banks react more to the monetary policy rule than less-sound banks? The paper finds evidence of an active and statistically and economically significant bank lending channel for the Eurozone between 2000 and 2009.N/