Does Basel Compliance Matter for Bank Performance?
IMF Working Papers, May 5, 2015
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Bibliographic details
- Authors: Rym Ayadi, Barbara Casu, Barry Quinn
- Published: May 5, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475580389.001
Summary
- The global financial crisis underscored the importance of regulation and supervision to a well-functioning banking system that efficiently channels financial resources into investment.
- This paper assesses whether compliance with international regulatory standards and protocols enhances bank operating efficiency, focusing on:
- Adoption of international capital standards.
- Basel Core Principles for Effective Bank Supervision (BCP).
- The relationship between bank efficiency and regulatory compliance is investigated using the (Simar and Wilson 2007) double bootstrapping approach on an international sample of publicly listed banks.
- Main result: overall BCP compliance, or compliance with any of its individual chapters, has no association with bank efficiency.
Methodology
- Estimation approach: (Simar and Wilson 2007) double bootstrapping approach.
- Sample: international sample of publicly listed banks.
Key Findings
- Overall BCP compliance has no association with bank efficiency.
- Compliance with any individual BCP chapter likewise shows no association with bank efficiency.
Subject Areas and Keywords
- Subject: Bank regulation; Bank supervision; Banking; Basel Core Principles; Commercial banks; Emerging and frontier financial markets; Financial institutions; Financial markets; Financial regulation and supervision.
- Keywords: bank concentration; bank efficiency; bank performance; Bank regulation; Bank supervision; Basel Core Principles; BCP; BCP compliance; Central and Eastern Europe; Commercial banks; Efficiency; efficiency estimate; Emerging and frontier financial markets; Global; input efficiency; North America; Regulatory Compliance; WP.