Main determinants of efficiency and implications on banking concentration in the European Union

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Autore principale: Rafael Bautista Mesa
Natura: Artículo científico
Lingua:en
Pubblicazione: Asociación Española de Profesores Universitarios de Contabilidad 2014
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author Rafael Bautista Mesa
author_facet Rafael Bautista Mesa
contents Main determinants of efficiency and implications on banking concentration in the European Union Rafael Bautista Mesa Horacio Molina Sánchez Jesús Nicolás Ramírez Sobrino Economía y Finanzas Bank efficiency Bank size Concentration Diversification Wholesale funding Capital ratio This study aims to measure the main determinants influencing bank efficiency. We suggest that the bank efficiency ratio, obtained from the income statement, is positively related to the size of a bank in terms of total assets. However, we believe that such a relationship cannot be maintained for banks over a certain size. By the use of the regression analysis method, we analyze the link between bank efficiency and bank size, using a sample of 3952 banks in the European Union. Our results show that the efficiency ratio stops improving for banks with total assets over $25 billion. Previous literature, using different analysis techniques, does not reach an agreement on this point. Furthermore, our study identifies further variables which negatively affect the efficiency of banks, such as competition and lending diversification, or affect them positively, such as the wholesale funding ratio and income diversification. Our findings imply the need for different bank policies depending on total assets, in order to limit the size and activities of banks. 2014 artículo científico 1138-4891 https://www.redalyc.org/articulo.oa?id=359733646008 en http://www.redalyc.org/revista.oa?id=3597 Revista de Contabilidad application/pdf Asociación Española de Profesores Universitarios de Contabilidad Revista de Contabilidad (España) Num.1 Vol.17
format Artículo científico
id redalyc_359733646008
institution Redalyc
language en
publishDate 2014
publisher Asociación Española de Profesores Universitarios de Contabilidad
spellingShingle Main determinants of efficiency and implications on banking concentration in the European Union
Rafael Bautista Mesa
Economía y Finanzas
Bank efficiency Bank size Concentration Diversification Wholesale funding Capital ratio
Main determinants of efficiency and implications on banking concentration in the European Union Rafael Bautista Mesa Horacio Molina Sánchez Jesús Nicolás Ramírez Sobrino Economía y Finanzas Bank efficiency Bank size Concentration Diversification Wholesale funding Capital ratio This study aims to measure the main determinants influencing bank efficiency. We suggest that the bank efficiency ratio, obtained from the income statement, is positively related to the size of a bank in terms of total assets. However, we believe that such a relationship cannot be maintained for banks over a certain size. By the use of the regression analysis method, we analyze the link between bank efficiency and bank size, using a sample of 3952 banks in the European Union. Our results show that the efficiency ratio stops improving for banks with total assets over $25 billion. Previous literature, using different analysis techniques, does not reach an agreement on this point. Furthermore, our study identifies further variables which negatively affect the efficiency of banks, such as competition and lending diversification, or affect them positively, such as the wholesale funding ratio and income diversification. Our findings imply the need for different bank policies depending on total assets, in order to limit the size and activities of banks. 2014 artículo científico 1138-4891 https://www.redalyc.org/articulo.oa?id=359733646008 en http://www.redalyc.org/revista.oa?id=3597 Revista de Contabilidad application/pdf Asociación Española de Profesores Universitarios de Contabilidad Revista de Contabilidad (España) Num.1 Vol.17
title Main determinants of efficiency and implications on banking concentration in the European Union
topic Economía y Finanzas
Bank efficiency Bank size Concentration Diversification Wholesale funding Capital ratio
url https://www.redalyc.org/articulo.oa?id=359733646008