Managerial efficiency and failure of U.S. commercial banks during the 2007-2009 financial crisis: was this time different?
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1 juillet 2016
- handle: 10670/1.cyfzfd
Ce document est lié à :
10.17230/ecos.2016.43.1
info:eu-repo/semantics/openAccess
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Bank Failure Profit Efficiency Hazard Models.Sujets proches
Failure of banksCiter ce document
Pilar B. Alvarez-Franco et al., « Managerial efficiency and failure of U.S. commercial banks during the 2007-2009 financial crisis: was this time different? », Ecos de Economía, ID : 10670/1.cyfzfd
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Résumé
Compared with previous crises few banks failed as a result of the U.S. financial crisis of 2007-2009. We investigate the role played by managerial efficiency in the non-systemic bank failures during the crisis. During previous waves of bank failures, cost-inefficient banks and banks with relatively less capital or low-quality assets were more likely to fail. Using data from 2001 to 2010, we show that profit inefficiency-our proxy for managerial inefficiency- is a robust predictor of bank failures while cost inefficiency is unrelated to them. In addition, capital adequacy lost importance in predicting non-systemic bank failures during the crisis while loan quality remained a strong predictor. Our results suggest that profit efficiency can be an important managerial indicator in monitoring banks.