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Bank performance and convergence during the financial crisis: Evidence from the ‘old’ European Union and Eurozone

Matousek, Roman, Rughoo, Aarti, Sarantis, Nicholas, George Assaf, A. (2015) Bank performance and convergence during the financial crisis: Evidence from the ‘old’ European Union and Eurozone. Journal of Banking and Finance, 52 . pp. 208-216. ISSN 0378-4266. (doi:10.1016/j.jbankfin.2014.08.012) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL
http://doi.org/10.1016/j.jbankfin.2014.08.012

Abstract

This paper investigates the process of banking integration in the EU15 countries and the Eurozone by testing for convergence in bank efficiency among commercial banks. We use a two-step approach: First we estimate efficiency by applying an innovative methodological approach that treats banks’ non-performing loans as an undesirable output. Second, we apply the Phillips and Sul (2007) panel convergence methodology to assess the convergence process in European banking. Our results indicate an overall decline in efficiency and no evidence of group convergence following the financial crisis. However, we find the presence of club formation with typically weak convergence. The heterogeneity displayed by the transition parameters for the individual countries and the notable decrease in competition levels post 2008 highlight the impact of the financial crisis on the integration process.

Item Type: Article
DOI/Identification number: 10.1016/j.jbankfin.2014.08.012
Uncontrolled keywords: Convergence; European banking; Banking efficiency; Parametric distance function; Phillips and Sul convergence method
Subjects: H Social Sciences > HG Finance
Divisions: Faculties > Social Sciences > Kent Business School
Depositing User: Roman Matousek
Date Deposited: 23 Jun 2016 21:03 UTC
Last Modified: 29 May 2019 17:27 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/55860 (The current URI for this page, for reference purposes)
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