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IMF Bank-Restructuring Efficiency Outcomes: Evidence from East Asia

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  • Mohamed Ariff

    ()

  • Luc Can

    ()

Abstract

We report new findings on bank efficiency in East Asian countries for the preand post-IMF restructuring periods. We find that bank efficiency has improved, but only to the pre-IMF intervention level, and that restructured banks are not more efficient than their unrestructured counterparts. Different restructuring measures have different effects. Bank closures are economically justified, but mergers show short-term efficiency losses. Recapitalization and reprivatization of badly performing banks lead to efficiency improvement, but also increase government ownership. Ease of entry that has allowed for more foreign bank participation results in slightly improved performance of badly performing banks.

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File URL: http://hdl.handle.net/10.1007/s10693-008-0047-2
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Bibliographic Info

Article provided by Springer in its journal Journal of Financial Services Research.

Volume (Year): 35 (2009)
Issue (Month): 2 (April)
Pages: 167-187

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Handle: RePEc:kap:jfsres:v:35:y:2009:i:2:p:167-187

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Web page: http://www.springerlink.com/link.asp?id=102934

Related research

Keywords: East Asian banking efficiency; IMF-supported programs; Bank restructuring; Bank re-privatization; Foreign participation; G21; G28; C14; N20;

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References

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Citations

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Cited by:
  1. Williams, Jonathan, 2012. "Efficiency and market power in Latin American banking," Journal of Financial Stability, Elsevier, vol. 8(4), pages 263-276.
  2. George Assaf, A. & Matousek, Roman & Tsionas, Efthymios G., 2013. "Turkish bank efficiency: Bayesian estimation with undesirable outputs," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 506-517.
  3. Barros, Carlos Pestana & Williams, Jonathan, 2013. "The random parameters stochastic frontier cost function and the effectiveness of public policy: Evidence from bank restructuring in Mexico," International Review of Financial Analysis, Elsevier, vol. 30(C), pages 98-108.
  4. Chen, Pei-Fen & Liu, Ping-Chin, 2013. "Bank ownership, performance, and the politics: Evidence from Taiwan," Economic Modelling, Elsevier, vol. 31(C), pages 578-585.
  5. Parinduri, Rasyad A. & Riyanto, Yohanes E., 2012. "The Impact of the Strategic Sale of Restructured Banks: Evidence from Indonesia," World Development, Elsevier, vol. 40(3), pages 446-457.
  6. Manlagñit, Maria Chelo V., 2011. "Cost efficiency, determinants, and risk preferences in banking: A case of stochastic frontier analysis in the Philippines," Journal of Asian Economics, Elsevier, vol. 22(1), pages 23-35, February.

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