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The Efficiency of European Regional Banking

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  • Jonathan Williams
  • Edward Gardener

Abstract

W ILLIAMS J. and G ARDENER E. P. M. (2003) The efficiency of European regional banking, Reg. Studies 37 , 321-330. Financial deregulation may segment European banking into pan-national and regional tiers. Regional banking must finance productive investment to facilitate regional economic growth. Local banks are the appropriate financing vehicles because of their specialist knowledge of regional market risks and conditions. Employing stochastic frontier analysis, the efficiency of regional banks in producing financial services is estimated along with the determinants of bank cost inefficiencies. Regional banks are found to be highly cost efficient with inefficiencies significantly correlated with bank liquidity, competitiveness, capitalization and organizational structure. Financial deregulation accompanies significant improvements in bank productivity whereas moves by banks towards industry best practice are positive but insignificant. W ILLIAMS J. et G ARDENER E. P. M. (2003) L'efficacite des operations bancaires regionales europeennes, Reg. Studies 37 , 321-330. Il se peut que la dereglementation financie re segmente les operations bancaires europennes en niveaux pan- nationaux et regionaux. Il est essentiel que les operations bancaires regionales financent l'investissment productif pour favoriser la croissance economique regionale. Les banques locales sont les organismes de financement les mieux places a cause de leurs connaissances specialisees des risques et des conditions des marches regionaux. A partir d'une analyse bornee stochastique, on estime l'efficacite des banques regionales quant a la production des services financiers, ainsi que les determinants de la non- rentabilite des banques. Il s'avere que les banques re gionales sont tres rentables, l'inefficacite se rapportant e troitement a la liquidite bancaire, a la competitivite, a la capitalisation et a la structure organisationnelle. La dereglementation financiere va de pair avec d'importantes ameliorations de la productivite bancaire, tandis que les efforts des banques en faveur des meilleures procedures suivies dans l'industrie s'averent positifs quoique negligeables. W ILLIAMS J. und G ARDENER E. P. M. (2003) Die Leistungsfahigkeit des europaischen regionalen Bankwesens, Reg. Studies 37 , 321-330. Finanzielle Wettbewerbsfreiheit konnte das europaische Bankwesen in pannationale und regionale Range aufteilen. Regionalbanken mussen produktive Investierungen finanzieren, um regionales Wirtschaftswachstum zu emoglichen. Ortsbanken sind dank ihrer Fachkenntnisse in Sachen Bedingungen und Risiken des regionalen Marktes das angemessene Mittel zur Bewaltigung der Finanzierung. Mit Hilfe stochasischer Grenzanalyse wird in diese Aufsatz die Leistungsfahigkeit des regionalen Bankwesens bei der Bereitstellung finanzieller Dienstleistungen berechnet, und auch die bestimmenden Faktoren bei Leistungsschwachen der Bankkosten. Es zeigt sich, dass regionale Banken eine hohe Kostenaffizienz aufweisen, wobei Schwachen in signifikanter Beziehung zur Bankliquiditat, Wettbewerbsfahigkeit, Kapitalisierung und organisatorischer Struktur stehen. Finanzielle Wettbewerbsfahigkeit geht Hand in Hand mit signifikanten Verbesserungen der Bankproduktvitat, wahrend Anstrengungen von Banken, sich Praktiken der Industrie anzupassen, zwar positiv ausfallen, doch unbedeutend bleiben.

Suggested Citation

  • Jonathan Williams & Edward Gardener, 2003. "The Efficiency of European Regional Banking," Regional Studies, Taylor & Francis Journals, vol. 37(4), pages 321-330.
    • Handle: RePEc:taf:regstd:v:37:y:2003:i:4:p:321-330
    DOI: 10.1080/0034340032000074361
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    Citations

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    Cited by:

    1. Francesco Aiello & Graziella Bonanno, 2018. "On The Sources Of Heterogeneity In Banking Efficiency Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 194-225, February.
    2. S. P. Chakravarty, 2006. "Regional variation in banking services and social exclusion," Regional Studies, Taylor & Francis Journals, vol. 40(4), pages 415-428.
    3. Shelagh Heffernan & Xiaoqing Fu, 2010. "Determinants of financial performance in Chinese banking," Applied Financial Economics, Taylor & Francis Journals, vol. 20(20), pages 1585-1600.
    4. Cristian BARRA & Roberto ZOTTI, 2019. "Bank Performance, Financial Stability And Market Concentration: Evidence From Cooperative And Non‐Cooperative Banks," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 103-139, March.
    5. Inekwe, John Nkwoma, 2021. "Finance and European regional economy," International Review of Financial Analysis, Elsevier, vol. 78(C).
    6. Christos Floros, 2020. "Banking Development and Economy in Greece: Evidence from Regional Data," JRFM, MDPI, vol. 13(10), pages 1-13, October.
    7. Anca Podpiera & Jiri Podpiera, 2005. "Deteriorating Cost Efficiency in Commercial Banks Signals an Increasing Risk of Failure," Working Papers 2005/06, Czech National Bank.
    8. Huang, Tai-Hsin & Lin, Chung-I & Chen, Kuan-Chen, 2017. "Evaluating efficiencies of Chinese commercial banks in the context of stochastic multistage technologies," Pacific-Basin Finance Journal, Elsevier, vol. 41(C), pages 93-110.
    9. Michal Jurek, 2014. "Role and impact of different types of financial institutions on economic performance and stability of the real sector in selected EU member states," Working papers wpaper36, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    10. Cristian Barra & Roberto Zotti, 2022. "Financial stability and local economic development: the experience of Italian labour market areas," Empirical Economics, Springer, vol. 62(4), pages 1951-1979, April.
    11. Francesco Aiello & Graziella Bonanno, 2016. "Efficiency in banking: a meta-regression analysis," International Review of Applied Economics, Taylor & Francis Journals, vol. 30(1), pages 112-149, January.
    12. Francesca Battaglia & Vincenzo Farina & Franco Fiordelisi & Ornella Ricci, 2010. "The efficiency of cooperative banks: the impact of environmental economic conditions," Applied Financial Economics, Taylor & Francis Journals, vol. 20(17), pages 1363-1376.
    13. BARRA, Cristian & ZOTTI, Roberto, 2018. "Financial Stability as a Public Policy Goal to Increase Local Economic Development: an Empirical Investigation from Italian Labour Market Areas," CELPE Discussion Papers 154, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    14. Kontolaimou, Alexandra & Tsekouras, Kostas, 2010. "Are cooperatives the weakest link in European banking? A non-parametric metafrontier approach," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1946-1957, August.
    15. Juan Fernandez de Guevara & Joaquin Maudos, 2009. "Regional Financial Development and Bank Competition: Effects on Firms' Growth," Regional Studies, Taylor & Francis Journals, vol. 43(2), pages 211-228.
    16. Rudra Sensarma, 2008. "Deregulation, ownership and profit performance of banks: evidence from India," Applied Financial Economics, Taylor & Francis Journals, vol. 18(19), pages 1581-1595.

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