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Applying efficiency measurement techniques to central banks

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  • Loretta J. Mester

Abstract

This paper reviews the standard techniques of efficiency measurement, discusses some of the issues that arise in applying these standard techniques to central banks, and reviews some of the literature that has attempted to apply these techniques to central banking. The uniqueness of some of the activities of central banking, the difficulty in measuring some of the central banking outputs, and the complicated and multiple objectives pursued by central banks makes application of the standard techniques problematic. However, certain central bank activities do lend themselves to efficiency measurement, e.g., payment services provision.

Suggested Citation

  • Loretta J. Mester, 2003. "Applying efficiency measurement techniques to central banks," Working Papers 03-13, Federal Reserve Bank of Philadelphia.
  • Handle: RePEc:fip:fedpwp:03-13
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    File URL: http://www.philadelphiafed.org/research-and-data/publications/working-papers/2003/wp03-13.pdf
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    References listed on IDEAS

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    Cited by:

    1. Mamatzakis, E & Koutsomanoli, A, 2009. "Risk in the EU banking industry and efficiency under quantile analysis," MPRA Paper 22492, University Library of Munich, Germany.
    2. Loretta J. Mester, 2005. "Optimal industrial structure in banking," Working Papers 08-2, Federal Reserve Bank of Philadelphia.
    3. JoAnne Morris & Tonny Lybek, 2004. "Central Bank Governance; A Survey of Boards and Management," IMF Working Papers 04/226, International Monetary Fund.
    4. Jorge E. Galán and & Miguel Sarmiento, 2008. "Banknote Printing at Modern central Banking: Trends, Costs and Efficiency," Money Affairs, Centro de Estudios Monetarios Latinoamericanos, vol. 0(2), pages 217-262, July-Dece.
    5. Bahta, Sirak & Malope, Patrick, 2014. "Measurement of competitiveness in smallholder livestock systems and emerging policy advocacy: An application to Botswana," Food Policy, Elsevier, vol. 49(P2), pages 408-417.
    6. Babalos, Vassilios & Mamatzakis, Emmanuel C. & Matousek, Roman, 2015. "The performance of US equity mutual funds," Journal of Banking & Finance, Elsevier, vol. 52(C), pages 217-229.
    7. Iftekhar Hasan & Loretta J Mester, 2008. "Central Bank Institutional Structure and Effective Central Banking: Cross-Country Empirical Evidence," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 50(4), pages 620-645, December.
    8. Maria Giorgetti, 2006. "Scope economies in the pharmaceutical sector," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 53(3), pages 373-401, September.
    9. E. Mamatzakis, 2015. "Risk and efficiency in the Central and Eastern European banking industry under quantile analysis," Quantitative Finance, Taylor & Francis Journals, vol. 15(3), pages 553-567, March.
    10. Chris Heerden & Riaan Rossouw, 2014. "Resource utilisation Efficiency: A South African Provincial Evaluation," South African Journal of Economics, Economic Society of South Africa, vol. 82(4), pages 475-492, December.
    11. Koutsomanoli-Filippaki, Anastasia I. & Mamatzakis, Emmanuel C., 2011. "Efficiency under quantile regression: What is the relationship with risk in the EU banking industry?," Review of Financial Economics, Elsevier, vol. 20(2), pages 84-95, May.

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    Keywords

    Banks and banking; Central;

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