faqs.org » Abstracts Index » Abstracts » Business

The structure-performance relationship for European banking

Article Abstract:

The concept of market structure was evaluated in connection to its possible relation to the performance of the largest European banks in 11 European countries banks during 1988-1991. Stochastic cost frontier techniques were used to determine measures of X-inefficiency and scale-inefficiency on the assumption that distributed error terms are half normal. Results indicate that there were no positive or important links between market structure and performance in the banks studied over the four-year period.

Financial institutions

---

Loan sales as a response to market-based capital constraints

Article Abstract:

A market-based model of bank loan sales is presented within the context of regulatory controls. It is shown that unregulated banks tend to sell loans to other banks instead of engaging in deposit liability funding. Private information is instrumental in enabling banks to finance projects to a reasonable degree depending on the ability of capital to support losses. The existence of a loan sales market, therefore, allows banks with enough capital to undertake more new projects.

Research, Asset-backed securities, Asset backed securities

---

Comments on papers presented by Carlstrom and Samolyk, and Jagtiani, Saunders, and Udell

Article Abstract:

Two separate papers by Carlstrom and Samolyk, on one hand, and Jagtiani, Saunders and Udell, on the other, discuss trends in the banking industry in the 1980's such as bank loan sales and off-balance sheet activities. The first two authors deal with a stylized model of bank loan sales which they could have expanded by including an analysis of equilibrial situations. The other paper deals with a statistical evaluation of financial innovation.

Innovations

Some parts © 2012 Advameg, Inc.