scholarly journals The Vanishing Interest Income of Chinese Banks

2021 ◽  
pp. 1-20
Author(s):  
Karlo Kauko
Keyword(s):  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Bank Loan ◽  
Frontier Analysis ◽  
Nonperforming Loans ◽  
Loan Portfolios ◽  
Interest Income ◽  
Chinese Banks ◽  
Loan Quality

Abstract Chinese banks likely have more nonperforming loans (NPLs) than officially reported. Banks’ NPLs often deviate from Benford's law. As hidden NPLs earn no interest income, loan quality problems may erode the gross interest income of banks. Using stochastic frontier analysis, we estimate the interest income of a hypothetical profit-maximizing Chinese bank with no credit quality problems. Taking the deviation of actual interest income from the calculated efficient income, we then attempt to reveal the amount of hidden NPLs in Chinese banks. Our results uncover a substantial weakening in the quality of Chinese bank loan portfolios in 2016.

Is Italian R&D spending becoming more efficient?

2009 ◽  
pp. 187-198
Author(s):  
Andrea Conte
Keyword(s):  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Jel Classification ◽  
Economic Downturn ◽  
Economic Data ◽  
Frontier Analysis ◽  
Empirical Estimates ◽  
Cross Country ◽  
Over Time

- The recent economic downturn is putting increasing pressure on governments to improve the quality of their public finances. Using macro-economic data on R&D expenditures and patents, this paper aims to determine whether business and government R&D spending has become more efficient over time and in comparison to other EU countries. Descriptive evidence is coupled with empirical estimates of cross-country efficiency of R&D expenditure calculated by the Stochastic Frontier Analysis. . Keywords: R&D, patents, efficiency, public finance Parole chiave: R&S, brevetti, efficienza, finanza pubblica. Jel Classification: O33 - H50 - C23

scholarly journals Computing nonperforming loan prices in banking efficiency analysis

2021 ◽  
Author(s):  
Elisa Fusco ◽  
Bernardo Maggi
Keyword(s):  
Stochastic Frontier Analysis ◽  
Panel Study ◽  
Stochastic Frontier ◽  
Efficiency Analysis ◽  
Banking Efficiency ◽  
Frontier Analysis ◽  
Nonperforming Loans ◽  
European Banks ◽  
Regulatory Interventions ◽  
Recent Financial Crisis

AbstractWithin the framework of banking efficiency analysis, we propose a methodology for computing unobservable shadow prices for nonperforming loans (NPL). Our approach is to include NPL as an undesirable output variable in a distance function stochastic frontier analysis. We conduct a panel study of US and European banks during the most recent financial crisis by adopting a semi-nonparametric Fourier specification, which ensures convergence to the true values of both the estimated function and the related efficiency. Computing NPL prices has several advantages, such as identifying approaching crises, quantifying the responsibilities of governments and banks for credit risk and determining appropriate regulatory interventions.

scholarly journals Strategies to increase production efficiency in Indonesian Sharia commercial banks using Stochastic Frontier Approach (SFA)

2019 ◽  
Vol 21 (3) ◽  
pp. 379 ◽  
Author(s):  
Pratystya Ika Wardhani ◽  
Abdul Mongid
Keyword(s):  
Commercial Banks ◽  
Production Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Islamic Banks ◽  
Tobit Regression ◽  
Increase Production Efficiency ◽  
Frontier Analysis ◽  
Asset Quality

The purpose of this research is to examine the right strategy in increasing production efficiency in Sharia commercial banks in Indonesia. This research was conducted in two stages of testing. The first stage is estimating the level of production efficiency of Indonesian Islamic banks in 2010-2017 through the Stochastic Frontier Analysis (SFA) approach. The second stage uses Tobit regression to examine the relationship between the efficiency of production of sharia commercial banks with specific bank characteristics, including; LASSET, CAR, NPF, GCG, NOM and FDR. The results indicate that the level of production efficiency of sharia commercial banks is strongly influenced by several things. From the input side, optimization of DPK, PSC and LC components is needed to maximize production efficiency. This study also found that CAR (solvency performance), NPF (asset quality performance), NOM (profitability performance), and FDR (liquidity performance) greatly influenced variations in the efficiency of Indonesian Islamic banks. Improving the quality of financing supported by an increase in the operational system and the quality of human resources and began to concentrate on revenue sourced from services to be a solution that could be implied by Indonesian Islamic banks.

Does corporate governance explain the quality of bank loan portfolios?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vera Fiador ◽  
Emmanuel Sarpong-Kumankoma
Keyword(s):  
Corporate Governance ◽  
Banking Sector ◽  
Bank Loan ◽  
Estimation Model ◽  
Content Type ◽  
Loan Portfolios ◽  
Loan Quality ◽  
Asset Quality ◽  
The Impact

Purpose The purpose of this study is to assess the impact of corporate governance variables on the quality of bank loan portfolios. Design/methodology/approach The study used a panel-corrected standard errors estimation model with the most recent 11-year data from 2006 to 2016 on selected Ghanaian banks. Findings The findings indicate that corporate governance is relevant within the banking sector and plays a key role in improving loan quality. Having a large board with the attendant pool of expertize, boards with mostly non-executive members and duality of the CEO-board chair can be harnessed to improve bank loan quality. Female participation on boards seems to detract from good performance, creating the impression of tokenism in the Ghanaian banking sector. Originality/value The study has important implications for board construction within the banking sector and the discourse on bank asset quality.

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