Abstracts » Business

A study of bank efficiency taking into account risk-preferences

Article Abstract:

The stochastic cost frontier approach was used to evaluate the efficiency of banks operating in the 3rd Federal Reserve District. In addition, the mean and mode of the conditional distribution of the one-sided error term was calculated along with the confidence intervals for conditional distribution-based inefficiency measures. The results showed that banks in the district were operating at cost-efficient output levels and product mixes. However, the banks' use of inputs was not as efficient.

Analysis, Cost (Economics), Costs (Economics)

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A theory of banking structure

Article Abstract:

Research was conducted to analyze the structure of bank-client relationships and to propose an explanation for the phenomena such as bank syndication. A modeling framework designed to analyze the specialization of banking activities based on the various functions that banks perform when rendering different financial services is proposed. The model supports two types of bank growth patterns. It also suggests that when new markets open up, the first mover incentive leads to racing behavior which results in headcount expansions and contractions.

Customer Relations, Models

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