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IMF Bank-Restructuring Efficiency Outcomes: Evidence from East Asia

  • Mohamed Ariff

    (Bond University)

  • Luc Can

    (Harvard Kennedy School)

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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Paper provided by Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo in its series CARF F-Series with number CARF-F-148.

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Length: 22 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:cfi:fseres:cf148
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