Inefficiency and heterogeneity in Turkish banking: 1990–2000

Recent studies have stressed the importance of privatization and openness to foreign competition for bank efficiency and economic growth. We study bank efficiency in Turkey, an emerging economy with great heterogeneity in bank types and ownership structures. Earlier studies of Turkish banking had three limitations: (i) excessive reliance on cost‐function frontier analyses, wherein volume of loans is a measure of banking output; (ii) pooling all banks or imposing ad hoc heterogeneity assumptions; and (iii) lack of a comprehensive panel data set for proper analysis of productivity and heterogeneity. We use an estimation–classification procedure to find likelihood‐driven classification of bank technologies in an 11‐year panel. In addition, we augment traditional cost‐frontier analysis with a labour‐efficiency analysis. We conclude that state banks are not particularly inefficient overall, but that they do utilize labour inefficiently. This partially supports recent calls for privatization. We also conclude that special finance houses (or Islamic banks) utilize the same technology as conventional domestic banks, and do so relatively efficiently. This suggests that they do not cause harm to the financial system. Finally, we conclude that foreign banks utilize a different technology from domestic ones. This suggests that one should not overstate their value to the financial sector. Copyright © 2005 John Wiley & Sons, Ltd.     

An insight into the specification of the input-output set for DEA-based bank efficiency measurement

Data envelopment analysis (DEA) has become one of the most widely used instruments for measuring bank efficiency. However, its application encounters many problems, which is evidenced by continuous evolvements in the DEA method so far. Our paper addresses the pitfalls of DEA in the context of measuring bank efficiency, with focus on the specification of performance factors. We aim at examining whether the input-output specification for banks in DEA applications is in consistence with the criteria upon which banks make decisions. Four bank behaviour models which are most popularly employed to determine input and output factors in DEA studies—the intermediation approach, production approach, user cost approach and value added approach—are comprehensively discussed and reviewed. The comparative reflection on the bank behaviour models and the standard DEA models shows that the input-output related pitfalls of a DEA application are associated with its implicitly fixed preference structure, flexible weight determination and limited explanatory power. Due to the pitfalls, the conventional DEA models may fail to capture bank behaviours. In such cases, DEA results can hardly reflect the performance in its true sense, i.e. how banks perform against the goals that they decide to pursue. The findings suggest focusing on (DEA-based) performance measurement from a goal-oriented perspective, i.e. from the point of view of multi criteria decision making.     

Foreign entry and the Turkish banking system in 2000s

In recent decades, the role of foreign ownership in banking sectors, and especially the developing ones has become a frequently investigated topic among finance scholars. Similar to many other developing countries seeking to attract foreign direct investments, Turkey has experienced a great increase in the number of foreign-owned banks in the sector following the 2000 and 2001 economic and financial crises. Using panel data regression analysis for a sample of 31 deposit banks operating in Turkey, for the period 2002–2012, we find that foreign ownership has a negative and statistically significant impact on accounting profits, proxied by the ratio of earnings before taxes to total assets. However, contrary to expectations, three other dependent variables representing interest rate spreads, non-lending activities and short term risk, were not found to be significantly associated with foreign ownership.     

The productivity and performance of Australia’s major banks since deregulation

The aim of this study is to present some measures of the performance of banks operating in Australia since the deregulation of the Australian financial system in early 1980s; including the periods of financial market instability (the early 1990s and mid to late 2000s). In undertaking this measurement two approaches will be used. The first simply applies standard financial indicators. The second approach applies data envelopment analysis (DEA), to determine Malmquist indices of the levels of and the changes in the efficiency and productivity of Australian banks. The empirical results demonstrate the effect of deregulation and periodic financial crisis’s on the performance of individual banks, and the major part of the Australian banking sector. Overall the productivity performance of the Australian banks tended to improve considerably in those periods of strongest economic growth (i.e. the mid 1980s and 2000s).     

A credit scoring approach for the commercial banking sector

For managing credit risk, commercial banks use various scoring methodologies to evaluate the financial performance of client firms. This paper upgrades the quantitative analysis used in the financial performance modules of state-of-the-art credit scoring methodologies. This innovation should help lending officers in branch levels filter out the poor risk applicants. The Data Envelopment Analysis-based methodology was applied to current data for 82 industrial/manufacturing firms comprising the credit portfolio of one of Turkey's largest commercial banks. Using financial ratios, the DEA synthesizes a firm's overall performance into a single financial efficiency score—the “credibility score”. Results were validated by various supporting (regression and discriminant) analyses and, most importantly, by expert judgments based on data or on current knowledge of the firms.     

Instability spillovers in the banking sector: A spatial econometrics approach

In the study, we employ a dynamic spatial panel model to identify factors that are the sources of instability spillover in the banking sector. Using a sample of publicly listed banks, we document that the stability of a bank depends not only on its own characteristics and the macroeconomic conditions of its home country, but also on the stability of other banks in the same and other countries. We find weak evidence that the spillover effects are greater from domestic banks than from foreign ones. This study has significant implications for market regulators in terms of the role of country interdependence as a spillover mechanism during times of financial turbulence.     

商业银行差异化经营动因及策略选择

随着金融业改革的深入和市场化的加深,银行间的经营竞争日益激烈。这其中金融产品研发和创新滞后,银行经营的同质化现象严重,差异化明显不足,严重制约了银行业健康长远发展。因此,银行要在竞争中取胜有必要实行差异化经营策略。论文在分析银行差异化经营的动因的基础上,利用Hoteling空间竞争模分析了银行差异化经营的效益问题,最后探讨了银行差异化经营的策略问题。     

基于EVA模型我国上市商业银行的绩效评价

本文根据目前我国商业银行的相关运营情况,通过分析相当数量的银行数据材料,综合运用理论分析和实证研究这样的方式,认真探讨EVA的绩效评价体系并分析它对于构建国内商业银行的巨大作用,分析促进国内商业银行价值增长的原因和相关的有效方案建议。     

商业银行市场结构与绩效关系的研究综述

伴随着我国商业银行的改组与上市,商业银行市场结构发生了转变,在绩效方面也得到了较大提高,但与国外商业银行相比,我国银行业的实际绩效相对较低,在经营绩效和管理效率等方面存在亟待解决的不足之处。国外关于商业银行市场结构与绩效方面的学术研究已相当丰富,我国学者近来也在这一领域不断取得进展。本文将对国内外关于商业银行市场结构与绩效这一方面的研究成果进行简单的解释与归纳概括,希望能够为商业银行的绩效研究提供有益的参考。     

The operating efficiency of financial holding and nonfinancial holding banks—Epsilou‐based measure metafrontier data envelopment analysis model

Previous bank efficiency studies assumed that the same efficient frontier system exists in different types of banks, but the conventional radial data envelopment analysis (DEA) model slacks are not counted in efficiency scores, and nonradial DEA models do not consider radial features. This paper develops an Epsilou‐based measure meta‐DEA approach for measuring the efficiencies and technology gaps of different bank types. The results are as the follows: The average efficiency and technology gaps of nonfinancial holding banks are better than those of financial holding banks. The nonfinancial holding banks are more efficient than financial holding banks in investment and other income.     

Employee perceptions of performance appraisals: a comparative study on Indian banks

Performance appraisal is the most critical human resource practice and an indispensable part of every organization; however, the practice continues to generate dissatisfaction among employees and is often viewed as unfair and ineffective. Indian banking sector is one of the biggest and fastest growing financial service sectors. The post-liberalization era has witnessed significant changes in the structure and operations of banks operating in India. Arrival of new private and foreign banks has given a cause to public sector banks to be more competitive, effective and innovative in their approach. Past researches have compared public and private sector banks and have indicated that new private sector banks are outscoring public sector banks in terms of technical and economic efficiency parameters. However, no study could be found that compared public and private banks in India on fairness perceptions of performance appraisal system. Therefore, this research studied the differences between public and private sector banks with respect to perception of fairness of the performance appraisal system and performance appraisal satisfaction. Perception of fairness of the performance appraisal system has been studied through nine factors. The study used independent samples t-test and qualitative analysis to study the mean differences between the two banks. Results indicated that private sector bank employees perceive greater fairness and satisfaction with their performance appraisal system as compared to public sector bank employees.     

基于DEA方法的银行网点服务绩效评价研究

随着我国银行业的发展,商业银行的绩效评价问题成为银行与专家学者共同关注的焦点。在回顾国内外研究成果的基础上,提出了银行绩效评价的DEA模型。并通过数据采集,进行了相关的实证分析。     

The Effect of Financial Liberalization on the Efficiency of Financial Institutions: The Case of Jordanian Commercial Banks

SUMMARY

Jordan undertook major financial sector liberalization starting in the early of 1990s. The effect of this reform on the efficiency of the banking sector is evaluated. A non-parametric method of Data Development Analysis (DEA) has been used to arrive at the efficiency scores for a panel data sample covering eight Jordanian commercial banks over the period 1984 to 2001. The findings suggest that liberalization program was followed by an observable increase in efficiency. Another finding of the study is that large banks demonstrated the faster productivity growth during the liberalization. The study has important implications such as guiding the government policy regarding deregulation and liberalization.     

Structural changes,competition and bank stability in Malaysia’s dual banking system

This paper assesses Malaysia’s competition landscape and its risk implications subsequent to conventional banking consolidation and Islamic banking penetration in the aftermath of the 1997/1998 Asian financial crisis. Employing a panel sample of conventional and Islamic commercial banks, it arrives at the following conclusions. First, the consolidation exercise, which has led to a significant reduction in the number of domestic commercial banks, has not stifled banking competition. Second, the paper provides empirical support for the competition-stability relationship, particularly for the conventional banking sector. Islamic banking sector risk appears to be neutral to market competition or market power, although there is limited evidence that it increases with overall market concentration. Finally, the analysis uncovers the risk-increasing effect of the Islamic banking market structure on the conventional banking sector. By contrast, conventional banking market concentration tends to reduce the credit risk of Islamic banks.     

我国商业银行个人理财业务探讨

近几年来,我国商业银行的个人理财业务已有了一定程度的发展。但从各商业银行个人理财业务的运作情况可以看出,我国商业银行的个人理财业务尚处于新兴阶段,真正能与外资银行相抗衡的理财业务内容并未能开展。本文通过对目前的个人理财理念及业务发展存在问题的研究,提出了相应的对策,希望可以促进商业银行个人理财业务的不断完善与发展。     

Monetary policy and bank performance: The role of business models

This paper examines the relationship between monetary policy and bank performance in a multiple-instrument environment, particularly highlighting the conditioning role of bank business models. Employing a unique dataset of Vietnamese commercial banks from 2007 to 2019, we display that banks react to monetary policy changes, either when the central bank increases policy rates or injects money into the economy through open market operations, by decreasing overall returns and increasing financial instability. Additionally, we document that the accumulation of foreign exchange reserves benefits bank outcomes, contrasting to open market operations, albeit the central bank uses both of these policy instruments to alter money supply in the economy. Our key analysis of interest reveals that business models considerably matter in the effects of monetary policy on bank performance. Collectively, our findings demonstrate that banks’ business models that yield more non-interest income or diversify more into different income sources may mitigate the pass-through of monetary policy to bank performance. This finding holds across all interest- and quantitative-based monetary policy indicators and across all the functions of risk-taking behavior, earning-profit capacity, and financial stability. Furthermore, while plotting the marginal effects of monetary policy, we realize that they are insignificant for banks whose business models heavily rely on non-traditional segments.     

特许权价值、最优关闭策略和存款保险定价

随着存款保险制度的推出以及金融机构退出机制的完善,国家声誉将逐渐退出银行无形资本。在激励相容的金融监管趋势下,特许权价值等市场约束力量会显著影响到商业银行的风险承担。在此逻辑基础上,以我国16家上市商业银行为研究对象,一方面探讨特许权价值影响下不同产权结构的商业银行的最优救助机制,另一方面通过最优救助临界指标,利用银行重组模型,推导合理的存款保险风险差别费率。     

The financial sector and the future of capitalism

Financial sector innovation and development since the 1970s contributed to global prosperity, but increased the probability of bank failures. The post-2007 financial crisis was one of many crises with idiosyncratic catalysts but common underlying causes. Public policies, such as deposit insurance, with moral hazard implications increased the likelihood of crises, and cheap money exacerbated the situation by encouraging highly leveraged investments. The policy challenge is to address moral hazard without repressing the financial sector. This is not the end of capitalism, but a reminder of the difficulty in policing the financial sector which is at the heart of capitalist economies.     

A STRATEGIC PERSPECTIVE OF BANK FINANCIAL CONGLOMERATES IN LONDON AFTER THE CRASH

The deregulation of financial markets has led to severe challenges for bank management and banking strategy. Investment banking is a sector that has experienced important and well-publicized changes. London's celebrated ‘Big Bang’ helped to stimulate new banking strategies that were characterized by the formation of so-called ‘bank financial conglomerates’. The October 1987 stock market crash, however, has precipitated strategic and organizational crises for many of these banks active in securities business and capital market products. This article re-examines investment banking strategies in London and some of the lessons associated with the crash experiences.     

银行业改革、赶超与开放——基于Malmquist TFP指数的实证分析

为评估近年来中国国有银行改革、城市商业银行赶超与银行业对外全面开放5年来外资银行效率的变化,主要采取"中介法",利用2005～2010年数据对中国本土和外资银行Malmquist TFP指数及其组成部分进行了测算分解和实证分析。研究表明:改革促进了中国银行业效率的提高;城市商业银行的"赶超"战略显著提升了效率;中国本土银行的纯技术效率亟待改善;中国银行业对外全面开放后,外资银行的全要素生产率有所提高,但规模效率和技术进步有待改进;股权/资产比率等因素降低了银行效率。