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Post-crisis regulatory reforms and bank performance: lessons from Asia

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journal contribution
posted on 14.03.2018, 15:02 authored by Barbara Casu, Bimei Deng, Alessandra FerrariAlessandra Ferrari
Based on a large dataset from eight Asian economies, we test the impact of post-crisis regulatory reforms on the performance of depository institutions in countries at different levels of financial development. We allow for technological heterogeneity and estimate a set of country-level stochastic cost frontiers followed by a deterministic bootstrapped meta-frontier to evaluate cost efficiency and cost technology. Our results support the view that liberalization policies have a positive impact on bank performance, while the reverse is true for prudential regulation policies. The removal of activities restrictions, bank privatization and foreign bank entry has a positive and significant impact on technological progress and cost efficiency. In contrast, prudential policies, which aim to protect the banking sector from excessive risk-taking, tend to adversely affect banks’ cost efficiency but not cost technology.

History

School

  • Business and Economics

Department

  • Economics

Published in

European Journal of Finance

Volume

23

Issue

15

Pages

1544 - 1571

Citation

CASU, B., DENG, B. and FERRARI, A., 2017. Post-crisis regulatory reforms and bank performance: lessons from Asia. European Journal of Finance, 23 (15), pp.1544-1571

Publisher

© Informa UK Limited (Taylor & Francis Group)

Version

AM (Accepted Manuscript)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Publication date

2017

Notes

This is an Accepted Manuscript of an article published by Taylor & Francis Group in The European Journal of Finance on 28/04/2016, available online: https://doi.org/10.1080/1351847X.2016.1177566

ISSN

1351-847X

eISSN

1466-4364

Language

en