Document Type
Article
Source Publication
Journal of Banking & Finance
Publication Date
8-2013
Volume
37
Issue
8
First Page
2879
Last Page
2892
Publisher
Elsevier
Keywords
Bank regulation; Supervision; Operating efficiency
Abstract
The recent global financial crisis has spurred renewed interest in identifying those reforms in bank regulation that would work best to promote bank development, performance and stability. Building upon three recent world-wide surveys on bank regulation (Barth et al., 2004, Barth et al., 2006 and Barth et al., 2008), we contribute to this assessment by examining whether bank regulation, supervision and monitoring enhance or impede bank operating efficiency. Based on an un-balanced panel analysis of 4050 banks observations in 72 countries over the period 1999–2007, we find that tighter restrictions on bank activities are negatively associated with bank efficiency, while greater capital regulation stringency is marginally and positively associated with bank efficiency. We also find that a strengthening of official supervisory power is positively associated with bank efficiency only in countries with independent supervisory authorities. Moreover, independence coupled with a more experienced supervisory authority tends to enhance bank efficiency. Finally, market-based monitoring of banks in terms of more financial transparency is positively associated with bank efficiency.
DOI
10.1016/j.jbankfin.2013.04.030
Scopus EID
https://www.scopus.com/inward/record.uri?eid=2-s2.0-84878635228&doi=10.1016%2fj.jbankfin.2013.04.030&partnerID=40&md5=984ada2b9b5f4e03dd3eff5682b82ae4
Print ISSN
03784266
E-ISSN
18726372
Full-text Version
Accepted Author Manuscript
Recommended Citation
Barth, J. R., Lin, C., Ma, Y., Seade, J., & Song, F. M. (2013). Do bank regulation, supervision and monitoring enhance or impede bank efficiency? Journal of Banking & Finance, 37(8), 2879-2892. doi: 10.1016/j.jbankfin.2013.04.030
