Financial freedom and bank efficiency: Evidence from the European Union

Chortareas, Georgios; Girardone, Claudia; Ventouri, Alexia

doi:10.1016/j.jbankfin.2012.11.015

Cited by 244 publications

(185 citation statements)

References 29 publications

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“…In short, we can conclude that country of origin is a matter for an efficiency study both in accounting based efficiency and economic efficiency. This finding is in line with Chortareas et al (2013) for European banking in term of country economic conditions such as economic freedom contribute to the efficiency. Previously, Dietsch & Lozano-Vivas (2000) conclude similarly that environment where the banks operate determine their efficiency score.…”

Section: Resultssupporting

confidence: 87%

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The Ef ciency and Inef ciency of the Banking Sectors: Evidence From Selected ASEAN Banking

abdul.mongid¹

2018

Preprint

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Section: Resultssupporting

confidence: 87%

“…However, the Singapore bank efficiency trend is downward. The findings confirmed Dietsch and LozanoVivas (2000), Chortareas, Girardone and Ventouri (2013) that cost efficiency is country specific.…”

Section: Literature Reviewsupporting

confidence: 87%

The Ef ciency and Inef ciency of the Banking Sectors: Evidence From Selected ASEAN Banking

abdul.mongid¹

2018

Preprint

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“…It is only recently that empirical studies have focused on specific aspects of economic freedom/liberalization and governance effectiveness in banking performance (Chortareas et al, 2013). Such studies which isolate the different impacts, confirm the importance of factors such as financial liberalisation, including interest rate deregulation, on bank efficiency.…”

Section: Banks and The Factors Driving Bank Crisesmentioning

confidence: 93%

“…This paper constitutes the first attempt, to our knowledge, to explicitly characterize the effects of interest rate deregulation on OECD banking crises between 1980 and 2012. Our approach combines both the macro (prudential) and micro (Chortareas et al 2013) strands of the literature on banking stability. To capture these dynamics we utilize the economic freedom index drawn from the Fraser Institute.…”

Section: Introductionmentioning

confidence: 99%

Interest rate liberalization and capital adequacy in models of financial crises

Barrell

Karim

Ventouri

2017

Journal of Financial Stability

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Abstract:We characterize the effects of interest rate liberalization on OECD banking crises, controlling for the standard macro prudential variables that prevail in the current literature. We use the Fraser Institute's Economic Freedom of the World database. We test for the direct impacts of interest rate liberalization on crisis probabilities and their indirect effects via capital adequacy. Over the period 1980 -2012, we find that interest rate liberalization has a crises reducing effect, and it appears that the beneficial effects work by strengthening capital buffers. We also show that when controlling for liberalization, capital adequacy and liquidity, the main driver of financial crises is property price growth. Our results invariant when we control for alternative sensitivity tests for robustness purposes.JEL classification: C52; E58; G21; G28

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“…Regarding the impact of fi nancial freedom on bank effi ciency, the results of Chortareas et al (2013) suggest that the higher the degree of an economy's fi nancial freedom, the higher the benefi ts for banks in terms of cost advantages and overall effi ciency. Our results also show that the effects of fi nancial freedom on bank effi ciency tend to be clearer in countries with freer political systems in which governments formulate and implement sound policies and higher quality governance.…”

Section: Literature Reviewmentioning

confidence: 99%

Untitled

2018

JBFE

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The aim of this study is to analyze the determinants of the bank profitability and efficiency in conventional banks. This study compares accounting-based and economic-based measures of efficiency and profitability of conventional banks in fourteen countries. Accounting variables help explain cost and profit efficiency, but cost efficiency has little impact on profitability and profit efficiency. In fact, the study of profitability is crucial in assessing the health of organizations. However, profitability of the banking sector is particularly important as the soundness of the sector is closely related to the soundness of the entire economy. In this paper, banks' profitability and its determinants in Tunisia as well as in 13 different countries were investigated. The determinants of bank profitability are analyzed with the data from 110 banks over the period 1999-2012 using the panel data method generalized method of moments. Our results suggest that researchers should probably focus more on profit efficiency than cost efficiency. Almost all banks are below the optimal size. JEL Classification: G14, G21, G32

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Financial freedom and bank efficiency: Evidence from the European Union

Cited by 244 publications

References 29 publications

The Ef ciency and Inef ciency of the Banking Sectors: Evidence From Selected ASEAN Banking

The Ef ciency and Inef ciency of the Banking Sectors: Evidence From Selected ASEAN Banking

Interest rate liberalization and capital adequacy in models of financial crises

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