Abstract:The paper emphasizes that any approach to defi ning technical effi ciency in banking is just a diff erent outlook on manifold goals and functions that commercial banks pursue. Three commonly applied approaches, i.e. the service-oriented approach, the intermediation approach and the profi toriented approach, are not in confl ict but are complementary in providing information on how commercial banks perform in fi nancial intermediation, provision of banking services and profi t seeking. In addition to the methodological contribution of the paper, it investigates the effi ciency of the Slovak banking industry over the years 2000-2011 so as to fi nd whether employment of a specifi c approach changes the view on effi ciency of individual commercial banks. To this end, the non-parametric method of evaluation is employed based on the slack-based measure model of data envelopment analysis. The results suggest that general impressions of the effi ciency status of individual banks as obtained within the three approaches are similar in most cases.Keywords: effi ciency, the Slovak banking industry, SBM model, the intermediation approach, the service-oriented approach, the profi t-oriented approach JEL Classifi cation: G21, C44

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Front page design Grzegorz Rogoziński CD cover design Beata DębskaArticles published in the form submitted by the authors All rights reserved. No part of this book may be reproduced in any form or in any means without the prior permission in writing of the Publisher

Abstract. The paper challenges the widespread use of Altman's bankruptcy formula known as the "Z-score model" in Slovak corporate practice and comes with the goal to verify its usability in the Slovak economic environment. To this end, a definition of financial distress is adopted that summarizes weaknesses of Slovak enterprises stemming particularly from liquidity drain and operating losses. The verification juxtaposes three variants of the Z-score model and assesses their prediction ability using a data set of Slovak enterprises for the period from 2009 until 2013. Both the original 1968 Z-score model and the revised 1983 Z-score devised for the US economic environment are compared with the Z-score model re-estimated to the Slovak data copying the methodological procedure of Altman. The results indicate that Altman's bankruptcy formula is portable into the Slovak economic conditions and useful for predicting financial difficulties in view of the adopted definition of financial distress. Altman's original and (especially the) revised formulation of the Z-score model are preferable if overall classification accuracy is the main interest. Finally, it is advisable to re-estimate the coefficients of the Z-score model if financially distressed enterprises are the focus and the goal is to classify distressed enterprises as best as possible.

It is common practice in data envelopment analysis to assess commercial banks by the efficiency that they display in their operations under different outlooks on their behaviour; yet, even the intermediation approach does not measure actually the success with which commercial banks or a banking sector fulfil their mission of financial intermediaries. Such an assessment is traditionally accomplished by means of the loan-to-deposit ratio that captures rather size or depth of financial intermediation, but no link is sought to best practices that are observed in the banking sector. The paper proposes a model of financial intermediation that permits assessing on a comparative basis the attainment in financial intermediation. The devised index of financial intermediation recognizes through weights that diverse outcomes of financial intermediation exhibit differentiated importance to the economy and is closely connected with the weighted slacks-based measure (WSBM). The WSBM that emerges in this respect encompasses only production variables that define financial intermediation (i.e. deposits and intermediated outputs) whilst other production variables are treated as non-discretionary. The model can be applied in variants for a single commercial bank in one specific year (Model I) or for aggregated bankyears such as one particular bank over the entire period or various banks in one year (Model II). The ideas are demonstrated on a data set of Slovak commercial banks for the period between 2008 and 2016 and the difference of the proposed approach with traditional efficiency measurement under the intermediation approach is discussed. KeywordsFinancial intermediation • Loan-to-deposit ratio • Data envelopment analysis (DEA) • Weighted slacks-based measure (WSBM) • Aggregation over years or banks JEL Classification G20 • E59 • O50

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The paper challenges the common practice of estimating Okun's law at a regional level and investigates the mathematical and statistical model valid for regional applications. Confining to the difference version of Okun's law, the paper demonstrates that if a trade‐off between output fluctuations and fluctuations in the labour market is to hold on an economy‐wide level, a completely different specification of Okunian equations ensues for regions than is currently considered in research studies on the topic. An econometric approach is proposed to provide estimates of Okunian equations compliant with the disaggregation model, and the issue is demonstrated for Italian regions.