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An analysis of efficiency and scale economies of the European banking groups during the crisis

Vincenzo Pacelli, Francesca Pampurini
January 2016 - n. 1
Jel codes: G21

Our work compares the relative efficiency of the most important European banking groups over the period 2005-2013 by employing a parametric approach (Stochastic Frontier Analysis) to determine the effects of the recent financial crisis on efficiency. Our analysis focuses also on scale economies in order to understand if the most important banking groups are able to make the most of their size or, on the contrary, they suffer a problem of scale diseconomies due to the high level of complexity . Unlike most literature that usually considers individual banks (even if they belong to the same financial conglomerate) our units are banking groups. This methodological choice should reduce the distortions caused by intercompany accounting policies

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