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The efficiency of emerging Europe’s banking sector before and after the recent economic crisis

Author

Listed:
  • George Anayiotos

    (International Monetary Fund, Washington)

  • Hovhannes Toroyan

    (Armenian State University of Economics, Yerevan)

  • Athanasios Vamvakidis

    (International Monetary Fund, Washington)

Abstract

This paper provides estimates for the relative efficiency of banks in emerging Europe before the recent boom, just before the crisis, and right after the crisis, using a Data Envelopment Analysis (DEA). The results suggest that DEA efficiency scores before the recent crisis were strongly linked to the host country’s level of development; were higher for foreign-owned banks; but did not stand out for bank groups with a presence in more than one country. The results also suggest that bank efficiency increased during the precrisis boom, but fell during the crisis. Finally, foreign-owned banks in emerging Europe seem to be less efficient than their mother banks, suggesting that although they may bring some efficiency benefits to their host country, they are highly affected by the local business and operational environment.

Suggested Citation

  • George Anayiotos & Hovhannes Toroyan & Athanasios Vamvakidis, 2010. "The efficiency of emerging Europe’s banking sector before and after the recent economic crisis," Financial Theory and Practice, Institute of Public Finance, vol. 34(3), pages 247-267.
    • Handle: RePEc:ipf:finteo:v:34:y:2010:i:3:p:247-267
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    References listed on IDEAS

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    Cited by:

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    2. Efendic Velid & Hadziahmetovic Nejra, 2017. "The social and financial efficiency of microfinance institutions: the case of Bosnia and Herzegovina," South East European Journal of Economics and Business, Sciendo, vol. 12(2), pages 85-101, December.
    3. Swati Chauhan, 2021. "Social and Financial Efficiency: A Study of Indian Microfinance Institutions," IIM Kozhikode Society & Management Review, , vol. 10(1), pages 31-43, January.
    4. Vaclav Hausenblas & Jitka Lesanovska, 2018. "How Do Large Banking Groups Manage the Efficiency of Their Subsidiaries? Evidence from CEE," Working Papers 2018/13, Czech National Bank.
    5. Eva Horvatova, 2018. "Technical Efficiency of Banks in Central and Eastern Europe," IJFS, MDPI, vol. 6(3), pages 1-25, July.
    6. Polina K. Kirilova, 2015. "Assessing the Creditworthiness of Patchwork Portfolio Entrepreneurs in Emerging Markets: an Investment Theory-Based Approach," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 53-65, March.
    7. Iveta Palecková, 2017. "Application of Window Malmquist Index for Examination of Efficiency Change of Czech Commercial Banks," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 3, pages 173-190, September.
    8. Iveta Palečková, 2015. "Banking efficiency in the Czech Republic and Slovakia using the DEA Window Analysis," Working Papers 0012, Silesian University, School of Business Administration.
    9. Iveta Palečková, 2018. "Differences in Efficiency between Banks in Financial Conglomerates and other Banks in the Banking Sectors in Visegrad Countries," Working Papers 0052, Silesian University, School of Business Administration.
    10. Eva Horvatova, 2020. "Twenty Years of Mortgage Banking in Slovakia," IJFS, MDPI, vol. 8(3), pages 1-30, September.
    11. Ewa Miklaszewska & Katarzyna Mikołajczyk & Małgorzata Pawłowska, 2013. "Post-crisis Regulatory Architecture and Central and East European Banks," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 7-8, pages 63-85.
    12. du Toit, Elda & Cuba, Yolanda Z., 2018. "Cost and profit efficiency of listed South African banks pre and post the financial crisis," Research in International Business and Finance, Elsevier, vol. 45(C), pages 435-445.

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