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From scratch to efficiency gains after a financial crisis? A tale of a restructured banking system

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  • Gustavo Ferro
  • Sonia León
  • Carlos A. Romero
  • Damián Wilson

Abstract

We study the efficiency of the Argentine banking system after the 2001–2002 crisis. The financial system had to be restructured from scratch and recovered jointly with the economy, but its productivity and average cost levels have been stagnant since 2007. The analysis includes efficiency frontier estimations for retail banks and a comparison of subsamples for different categories of banks for the period 2005–15. We try to determine whether public banks are more efficient than private ones, whether privatized are more efficient than always private, as well as national versus foreign entities. Our findings show a modest average efficiency of the system and quite similar efficiency rankings for the different groups of banks. On average, public tend to be slightly more cost efficient than private, and national are slightly more efficient than foreign.

Suggested Citation

  • Gustavo Ferro & Sonia León & Carlos A. Romero & Damián Wilson, 2018. "From scratch to efficiency gains after a financial crisis? A tale of a restructured banking system," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(1), pages 119-133, January.
    • Handle: RePEc:taf:irapec:v:32:y:2018:i:1:p:119-133
    DOI: 10.1080/02692171.2017.1338675
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    References listed on IDEAS

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    2. Clarke, George R.G. & Cull, Robert, 2005. "Bank privatization in Argentina: A model of political constraints and differential outcomes," Journal of Development Economics, Elsevier, vol. 78(1), pages 133-155, October.
    3. Clarke, George R. G. & Cull, Robert, 1999. "Why Privatize? The Case of Argentina's Public Provincial Banks," World Development, Elsevier, vol. 27(5), pages 865-886, May.
    4. Berger, Allen N. & Clarke, George R.G. & Cull, Robert & Klapper, Leora & Udell, Gregory F., 2005. "Corporate governance and bank performance: A joint analysis of the static, selection, and dynamic effects of domestic, foreign, and state ownership," Journal of Banking & Finance, Elsevier, vol. 29(8-9), pages 2179-2221, August.
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