Efficiency and Risk in Latin American Banking: Explaining Resilience

Kasman A., Carvallo O.

EMERGING MARKETS FINANCE AND TRADE, cilt.49, sa.2, ss.105-130, 2013 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 49 Sayı: 2
  • Basım Tarihi: 2013
  • Doi Numarası: 10.2753/ree1540-496x490207
  • Dergi Adı: EMERGING MARKETS FINANCE AND TRADE
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.105-130
  • Anahtar Kelimeler: capital, efficiency, Latin American banking, risk, COST EFFICIENCY, SCALE ECONOMIES, MORAL HAZARD, PANEL-DATA, COMPETITION, TRANSITION, CAPITALIZATION, MANAGEMENT
  • Dokuz Eylül Üniversitesi Adresli: Evet

Özet

Using an unbalanced panel of 272 commercial banks, we estimate cost and revenue efficiency scores for fifteen Latin American and Caribbean countries over the period 2001-8. Using Granger causality techniques, we find evidence that in the face of increased risk and lowered capital, banks have tended to improve cost efficiency. The results also indicate that cost efficiency is negatively related with revenue efficiency, both dynamically and across countries. Market concentration is related to greater revenue efficiency. In the absence of developed capital markets, competitive forces and strengthened regulation seem to be forcing cost-efficiency improvements. Banks with market power, however, seem to be able to pass on to customers the cost of raising capital buffers and provisioning for risk.