The Impact of Supervision on Bank Performance

Hirtle, Beverly; Kovner, Anna; Plosser, Matthew

doi:10.1111/jofi.12964

Cited by 157 publications

(78 citation statements)

References 37 publications

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“…Empirically, our result is consistent with Pasiouras (2008a) and Luo et al's (2016) findings on global banking industries. Hirtle et al (2016) found similar results in the US bank-holding companies. Official supervisory power is not significantly related to banks' scale efficiency.…”

Section: Impact Of Bank Regulation Supervision and Ownership On Bansupporting

confidence: 68%

Role of Bank Regulation on Bank Performance: Evidence from Asia-Pacific Commercial Banks

Yang

Gan

2019

JRFM

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The banking industry is an essential financial intermediary, thus the efficient operation of banks is vital for economic development and social welfare. However, the 2008 global financial crisis triggered a reconsideration of the banking systems, as well as the role of government intervention. The literature has paid little attention to the banking industry in the Asia-Pacific region in the context of bank efficiency. This study employs double bootstrap data envelopment analysis to measure bank efficiency and examine the relationship between regulation, supervision, and state ownership in commercial banks in the Asia-Pacific region for the period 2005 to 2014. Our results indicate that excluding off-balance sheet activities in efficiency estimations lead to underestimating of the pure technical efficiency, while overestimating the scale efficiency of banks in the Asia-Pacific region. Cross-country comparisons reveal that Australian banks exhibit the highest levels of technical efficiency, while Indonesian banks exhibit the lowest average. Our bootstrap regression results suggest that bank regulation and supervision are positively related to bank technical efficiency, while state ownership is not significantly related to bank efficiency. Furthermore, our findings show that tighter regulation and supervision are significantly related to higher efficiency for small and large-sized banks.

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Section: Impact Of Bank Regulation Supervision and Ownership On Bansupporting

confidence: 68%

Role of Bank Regulation on Bank Performance: Evidence from Asia-Pacific Commercial Banks

Yang

Gan

2019

JRFM

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“…[], Bushman and Williams []) . Other recent studies have looked at similar questions using quasi‐natural variation in bank regulatory enforcement (e.g., Hirtle, Kovner, and Plosser [], Gopalan, Kalda, and Manela [], Granja []). Nicoletti [] uses variation in regulatory strictness from Agarwal et al.…”

Section: Introductionmentioning

confidence: 99%

Do Strict Regulators Increase the Transparency of Banks?

Costello

Granja

Weber

2019

J of Accounting Research

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We investigate the role that regulatory strictness plays on the enforcement of financial reporting transparency in the U.S. banking industry. Using a novel measure of regulatory strictness in the enforcement of capital adequacy, we show that strict regulators are more likely to enforce restatements of banks' call reports. Further, we find that the effect of regulatory strictness on accounting enforcement is strongest in periods leading up to economic downturns and for banks with riskier asset portfolios. Overall, the results from our study indicate that regulatory oversight plays an important role in enforcing financial reporting transparency, particularly in periods leading up to economic crises. We interpret this evidence as inconsistent with the idea that *

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“…Hirtle, Kovner, and Plosser (2016) find that modern banks that receive more regulatory scrutiny tend to have more conservative loan loss provisioning practices. Thus, both their results and our results suggest that one channel through which examiners played a role is through the managing of losses.…”

mentioning

confidence: 88%

“…These studies, however, do not provide evidence about whether and how this information is used by supervisors or markets to affect bank behavior. 1 Other studies have found that banks subject to more intensive examinations tend to have lower loan delinquency rates (Rezende and Wu 2014;Hirtle, Kovner, and Plosser 2016), but the mechanism by which this happens remains unclear.…”

Section: Introductionmentioning

confidence: 99%

Bank Examiners’ Information and Expertise and Their Role in Monitoring and Disciplining Banks Before and During the Panic of 1893

Calomiris¹,

Carlson²

2018

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The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research or of the Board of Governors of the Federal Reserve System and its staff. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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The Impact of Supervision on Bank Performance

Cited by 157 publications

References 37 publications

Role of Bank Regulation on Bank Performance: Evidence from Asia-Pacific Commercial Banks

Role of Bank Regulation on Bank Performance: Evidence from Asia-Pacific Commercial Banks

Do Strict Regulators Increase the Transparency of Banks?

Bank Examiners’ Information and Expertise and Their Role in Monitoring and Disciplining Banks Before and During the Panic of 1893

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