Economic literature pays a great deal of attention to the performance of banks, expressed in terms of competition, concentration, efficiency, productivity and profitability. This book provides an all-embracing framework for the various existing theories in this area and illustrates these theories with practical applications. Evaluating a broad field of research, the book describes a profit maximizing bank and demonstrates how several widely-used models can be fitted into this framework. The authors also present an overview of the current major trends in banking and relate them to the assumptions of each model, thereby shedding light on the relevance, timeliness and shelf life of the various models. The results include a set of recommendations for a future research agenda. Offering a comprehensive analysis of bank performance, this book is useful for all of those undertaking research, or are interested, in areas such as banking, competition, supervision, monetary policy and financial stability.
Author(s): Jacob Bikker, Jaap W.B. Bos
Edition: 1
Publisher: Routledge
Year: 2008
Language: English
Pages: 173
Book Cover......Page 1
Title......Page 6
Copyright......Page 7
Dedication......Page 8
Contents......Page 10
Figures......Page 13
Tables......Page 14
About the authors......Page 15
Foreword......Page 17
Preface......Page 18
Part I: Background......Page 20
1 Introduction......Page 22
2 Production of the banking firm......Page 25
3 Regulation of the banking firm......Page 35
Part II: Theoretical framework......Page 42
4 Basic model of bank performance......Page 44
5 Market power models......Page 50
6 Efficiency of banks......Page 57
7 Synthesis......Page 63
Part III: Trends in banking......Page 66
8 Trends and the basic framework......Page 68
Part IV: Empirical results......Page 78
9 Data......Page 80
10 The Bresnahan model......Page 86
11 The Panzar–Rosse model......Page 96
12 The Structure–Conduct–Performance model......Page 105
13 The Cournot model......Page 108
14 X-efficiency......Page 110
15 Scale and scope economies......Page 117
16 Synthesis: the measurement of competition and efficiency......Page 126
Part V: Conclusions......Page 134
17 Summing up......Page 136
18 Research agenda......Page 138
Appendix 1: Guide for instructors......Page 140
Appendix 2: Programming code......Page 154
Notes......Page 155
References......Page 162
Index......Page 170
