Regulations and productivity growth in banking
AbstractThis paper examines the relationship between the regulatory and supervision framework and the productivity of banks in 22 countries over the period 1999-2006. We follow a semi-parametric two-step approach that combines Malmquist index estimates with bootstrap regressions. The results indicate that regulations and incentives that promote private monitoring have a positive impact on productivity. Restrictions on banks’ activities relating to their involvement in securities, insurance, real estate and ownership of non-financial firms also have a positive impact. However, regulations relating to the first and second pillars of Basel II, namely capital requirements and official supervisory power do not appear to have a statistically significant impact on productivity.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 13891.
Date of creation: 07 Feb 2009
Date of revision:
Banks; Basel II; Productivity; Regulations;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-14 (All new papers)
- NEP-BAN-2009-03-14 (Banking)
- NEP-EFF-2009-03-14 (Efficiency & Productivity)
- NEP-REG-2009-03-14 (Regulation)
- NEP-RMG-2009-03-14 (Risk Management)
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