The impact of capital ratio on lending of EU banks – the role of bank specialization and capitalization

Olszak, Małgorzata; Pipień, Mateusz; Roszkowska, Sylwia

doi:10.12775/equil.2016.002

Cited by 4 publications

(4 citation statements)

References 42 publications

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“…The parametric SFA has been criticized for relying on restrictive assumptions concerning the functional form and error term distribution (Bhatia et al, 2018). According to Olszak et al (2016), in banking sector, it is often stressed that the form of input transformation to output is often nonlinear and difficult to specify the exact form.…”

Section: Literature Reviewmentioning

confidence: 99%

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The effect of NPLs management in the PIIGS banking efficiency: an approach using non-parametric partial order-m frontiers

Chalampalakis,

Dokas,

Spyromitros

2023

JES

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PurposeThis study focuses on the banking systems evaluation in Portugal, Italy, Ireland, Greece and Spain (known as the PIIGS) during the financial and post-financial crisis period from 2009 to 2018.Design/methodology/approachA conditional robust nonparametric frontier analysis (order-m estimators) is used to measure banking efficiency combined with variables highlighting the effects of Non-Performing Loans. Next, a truncated regression is used to examine if institutional, macroeconomic, and financial variables affect bank performance differently. Unlike earlier studies, we use the Corruption Perception Index (CPI) as an institutional variable that affects banking sector efficiency.FindingsThis research shows that the PIIGS crisis affects each bank/country differently due to their various efficiency levels. Most of the study variables — CPI, government debt to GDP ratio, inflation, bank size — significantly affect banking efficiency measures.Originality/valueThe contribution of this article to the relevant banking literature is two-fold. First, it analyses the efficiency of the PIIGS banking system from 2009 to 2018, focusing on NPLs. Second, this is the first empirical study to use probabilistic frontier analysis (order-m estimators) to evaluate PIIGS banking systems.

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Section: Literature Reviewmentioning

confidence: 99%

“…, 2018). According to Olszak et al. (2016), in banking sector, it is often stressed that the form of input transformation to output is often nonlinear and difficult to specify the exact form.…”

Section: Literature Reviewmentioning

confidence: 99%

The effect of NPLs management in the PIIGS banking efficiency: an approach using non-parametric partial order-m frontiers

Chalampalakis,

Dokas,

Spyromitros

2023

JES

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“…One of them is defining inefficiency as the random variable that follows a certain probability distribution, which must be specified a priori, as well as the form of dependence transformation of input to the output. In the case of baking sector it is often stressed that the form of transformation of an input to an output is often nonlinear and difficult to specify [30]. Thus, the assumptions about the form of dependence and probability distribution of inefficiency are not usually known in practice.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Non-Parametric Approach to Measuring the Efficiency of Banking Sectors in European Union Countries

2018

APH

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The European banking sector has been in the center of interest for the last ten years. There are several reasons for this: An impact of global financial crisis on banks stability; Fundamental influence of banking sector on the effectiveness of governments' anti-crisis actions, Vulnerability of banking institutions to the crisis of the Euro currency and last, but not least, the problems of the biggest banks in Italy and Germany, which for the last decades have been considered as the most efficient. The financial crisis and its negative influence, not only on the small national banks, but also on the strongest International Institutions, has shown that the problem of measurement of efficiency of the banking sector is still a current topic, important not only from the perspective of academic research, but also form the point of view of National and International Regulators. In this context, the objective of this study is to propose a methodology for a comprehensive evaluation of operational efficiency of the banking sectors in EU countries. The pointed problem is often discussed in a nonlinear fashion. Thus, the potential methodological proposal should be based on the interaction of multiple inputs with multiple outputs, without the knowledge of the functional relationships between them. In the research, Data Envelopment Analysis, is given as a suitable instrument for this purpose. Thanks to this methodology we measured the degree of (in)efficiency of banking sectors in the EU countries. Additionally, we proposed measures to increase their efficiency. We found that there are differences between the efficiency of banking sectors of "old" fifteen and "new" EU member countries. We also confirmed that there is a noticeable difference between the efficiency of banking sectors within the European Monetary Union members and Countries which do not belong to the Euro-zone.

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“…Despite the decades-long development of various methods and methodologies, the process of evaluating the banking sector is still problematic (see Svitálková 2014). The primary reason is the heterogeneity of banking systems, the dynamics of the environment, the incompatible data base, legislative and other constraints in the country (Burianová, Paulík 2014;Olszak et al 2016). Strong pressures led to an increase of performance, efficiency and quality in companies, and to revelation of the dimensions that affect performance and efficiency.…”

Section: Introductionmentioning

confidence: 99%

Comparison of Selected Methods for Performance Evaluation of Czech and Slovak Commercial Banks

Gavurová

Belás

Kočišová

et al. 2017

Journal of Business Economics and Management

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The successful development of economy is based on the efficient and stable performance of commercial banks. A broad range of methods is used to evaluate them. Each method has its own specific features and logic, which results in the existence of discrepancies in the results of their evaluation. For this reason, as well as due to the elimination of model risk, numerous methods are recommended in practice to detect multidimensional disproportions in bank performance and to create a comparator base. This led to the realization of the research aimed at assessing the performance of selected Czech and Slovak banks by applying several methods and evaluating the process and outcome differences of these methods. The data were obtained from the non-consolidated financial statements published in the annual reports of the evaluated banks. The analysis showed that all methods have roughly the same results. Almost perfect correlation had been found not only among the methods of multi-criteria evaluation, but also among the other investigators.

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The impact of capital ratio on lending of EU banks – the role of bank specialization and capitalization

Cited by 4 publications

References 42 publications

The effect of NPLs management in the PIIGS banking efficiency: an approach using non-parametric partial order-m frontiers

The effect of NPLs management in the PIIGS banking efficiency: an approach using non-parametric partial order-m frontiers

Non-Parametric Approach to Measuring the Efficiency of Banking Sectors in European Union Countries

Comparison of Selected Methods for Performance Evaluation of Czech and Slovak Commercial Banks

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