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Regulations and productivity growth in banking

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  • Delis, Manthos D
  • Molyneux, Philip
  • Pasiouras, Fotios

Abstract

This 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 Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13891.

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Date of creation: 07 Feb 2009
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Handle: RePEc:pra:mprapa:13891

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Keywords: Banks; Basel II; Productivity; Regulations;

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Cited by:
  1. Sara G.Castellanos & Jesus G. Garza-Garcia, 2013. "Competition and Efficiency in the Mexican Banking Sector," Working Papers 1329, BBVA Bank, Economic Research Department.

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