The effect of basel regulations on banking efficiency: Evidence from Turkey

Abstract

The aim of this chapter is to analyze the impact of capital requirements on the cost efficiency of Turkish commercial banks from 2005 to 2017. While the efficiency scores are obtained from the stochastic frontier analysis, the quantile regression model is used for robustness check. The overall cost efficiency for the whole sample is found as approximately 68 %, suggesting that an average commercial bank could improve its cost efficiency by approximately 32 %. According to the results, there is a negative relationship between capital requirements and cost efficiency. © Peter Lang AG 2020