Does Basel Compliance Matter for Bank Performance?

By Rym Ayadi, Sami Ben Naceur, Barbara Casu, Barry Quinn

May 5, 2015

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Format: Chicago

Rym Ayadi, Sami Ben Naceur, Barbara Casu, and Barry Quinn. Does Basel Compliance Matter for Bank Performance?, (USA: International Monetary Fund, 2015) accessed December 4, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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. In this paper, we contribute to the ongoing policy debate by assessing whether compliance with international regulatory standards and protocols enchances bank operating efficiency. We focus specifically on the adoption of international capital standards and the 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. Our results indicate that overall BCP compliance, or indeed compliance with any of its individual chapters, has no association with bank efficiency.

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

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/100
Stock No:

WPIEA2015100
ISBN:

9781475580389
ISSN:

1018-5941

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