The Baltic banking system in the enlarged European Union: the effect of the financial crisis on efficiency

Larraz, José Luis Gallizo; Moreno, Jordi; Salvador, Manuel

doi:10.1080/1406099x.2017.1376430

Cited by 6 publications

(6 citation statements)

References 42 publications

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“…This striking finding raises the question as to why banks were willing to issue loans and take on greater credit risk even if dairy farms did not perform well, and whether this can be explained by the presence of CAP subsidies. On the one hand, while Estonian banking was found to be the most efficient in the Baltic countries after the latter county's accession to the EU and during the financial crisis (Gallizo et al, 2018), commercial banks may have experienced an inverse Ushaped relationship between competition and financial stability. Moreover, at above a certain threshold, the lack of competition could exacerbate the individual risk-taking behaviour of banks (Cuestas et al, 2020).…”

Section: Gmm-sys Estimationmentioning

confidence: 99%

The investment behaviour of dairy farms in transition economies

Fertő

Bojnec

Fogarasi

et al. 2021

Baltic Journal of Economics

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This article investigates dairy farm investment behaviour and the presence of soft budget constraints in the dairy farms of Baltic and Central European transition countries -Estonia, Hungary and Sloveniausing individual dairy farm accountancy panel data for the years 2007-2015. The empirical results confirm that gross dairy farm investment is positively associated with gross dairy farm investment for the previous year for financially unconstrained dairy farms, and negatively for financially constrained dairy farms. It is also positively associated with public investment subsidies, and, except for Slovenia, with growth in real sales for financially unconstrained dairy farms. Mixed results are found for gross dairy farm investment squared and cash flow variables. A particularly significant negative cash flow regression coefficient implies significant soft budget constraints for financially unconstrained Estonian and Slovenian dairy farms, while insignificant cash flow regression coefficients imply weak soft budget constraints for financially unconstrained Hungarian dairy farms.

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Section: Gmm-sys Estimationmentioning

confidence: 99%

The investment behaviour of dairy farms in transition economies

Fertő

Bojnec

Fogarasi

et al. 2021

Baltic Journal of Economics

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“…Later in 2012, Snoras Bank and Ukio Bankas also went bankrupt in Lithuania. According to Gallizo, Moreno, and Salvador (2018), the profitability of the Baltic banking system reduced due to economic downturns, higher cost of financing, illiquid markets, deterioration in loan portfolio growth, and large provisions for doubtful debts. Profitability measures such as average return on assets (ROA), in Estonia reduced to 1.4% in 2008 and −2.7% in 2009.…”

Section: Potential Advantage Of Islamic Banking Principles For Balticmentioning

confidence: 99%

Business orientation, efficiency, and credit quality across business cycle: Islamic versus conventional banking. Are there any lessons for Europe and Baltic States?

Nosheen

Rashid

2019

Baltic Journal of Economics

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This paper empirically investigates the difference between Islamic and conventional banks in terms of business dynamics, cost structure, credit quality, and stability. It also examines the difference in the response of two types of banks during peak and trough phases of the business cycle. The analysis is carried out for a sample of 280 banks in 20 countries over the 1995-2014 period. The results reveal that Islamic banks are more involved in fee-based business, are less cost-efficient, have higher credit quality, and have higher capitalization than conventional banks. We also find that Islamic banks outperformed conventional banks with regard to their credit quality and stability indicators during the trough phase of the business cycle. The improved performance seems to be due to the differences in the provisioning strategies of the two types of banks, the non-aggressive lending profile of Islamic banks, and investment in real assets. Finally, based on the empirical findings, the paper also highlights potential lessons that conventional banks in Baltic States, which were severely hit by the 2007-2008 global financial crisis, can draw from Islamic banking principles.

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“…The results for the period 2005-2008 found the banking sector in the Czech Republic as the most efficient and the banking sector in Hungary as the least efficient. Gallizo et al (2017) analyzed the evolution of banking efficiency in the Baltic countries after their accession to the EU and during the financial crisis. They estimated profit and cost efficiency during the period 2000-2013 using Bayesian stochastic frontier model.…”

Section: Results Related To the Dea (Data Envelope Analysis)mentioning

confidence: 99%

“…They compared their cost efficiency using the Stochastic Frontier Approach (SFA). Gallizo et al (2017) analyzed the efficiency of banks in Baltic countries (Estonia, Latvia, Lithuania) during the period 2000-2013 using the Bayesian stochastic frontier models. Novickytė and Droždz (2018) evaluated bank performance in a low interest rate environment of the banks owned by the Nordic parent group.…”

Section: Introductionmentioning

confidence: 99%

Technical Efficiency of Banks in Central and Eastern Europe

Horvátová

2018

IJFS

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The purpose of this article is to examine what affected the technical efficiency of banks in Central and Eastern European countries during the financial crisis. Firstly, this article analyzes the technical efficiency of banks in the selected countries in Central and Eastern Europe during the period 2006–2013. In this article, the technical efficiency of Central and Eastern European banks is explored in respect to the size of the banks (large or small) and their belonging in a specific group of countries. The results of the analysis show a strong association between the numbers of efficient banks and belonging of banks in the group of V4 countries (Visegrad countries are the Czech Republic, Hungary, Poland, and Slovakia). The banks in Balkan countries have a negative association with the number of efficient banks in the group; the banks in this group of countries have the highest average efficiency (when the output was net interest margin). There is a weak association between the number of efficient banks and their belonging in the group of Baltic countries. The bank efficiency and the size of the bank’s assets are also weakly associated. Secondly, the results of panel regression models for the specific groups of countries (V4, Baltic, and Balkan countries), as well as for the whole group of Central and Eastern European countries show that the customer deposits had a positive impact on the technical efficiency of banks during the financial crisis.

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The Baltic banking system in the enlarged European Union: the effect of the financial crisis on efficiency

Cited by 6 publications

References 42 publications

The investment behaviour of dairy farms in transition economies

The investment behaviour of dairy farms in transition economies

Business orientation, efficiency, and credit quality across business cycle: Islamic versus conventional banking. Are there any lessons for Europe and Baltic States?

Technical Efficiency of Banks in Central and Eastern Europe

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