Efficiency Analysis in Banking Firmsan International Comparison

Abstract

The intensive process of financial European integration, together with the profound transformation and deregulation that has taken place in the Spanish Banking System, justifies the evaluation of its efficiency in comparison with that of other banking systems. In this context, the aim of this study is to analyze the productivity, efficiency and differences in technology of several banking systems. Using a non-parametric approach together with the Malmquist index, we compare the efficiency, productivity and differences in technology of different European and US banking systems for the year 1992. Finally, for a subsample of banks belonging to the same group of countries, using real as opposed to nominal quantities of labor, we introduce corrections on efficiency measures, by introducing the services provided to customers by the branch network and the degree of solvency determined by capital ratio. When we consider these other features in computing efficiency, we find significant changes in the ranking of particular banks according to efficiency