No abstract

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

The nonparametric frontier methodology is applied to a sample of banks, where output levels are measured either by the number of accounts and their average size, or by the total balances of the accounts. The efficiency rankings of individual banks are found to depend substantially on our choice of output metric, whereas the estimated size of potential productivity improvements in the banking sector are less affected. The results on economies of scale are also largely unchanged.

The authors would like to thank Sherrill Shaffer, Tore Nilssen and Bent Vale for helpful comments on previous versions of this paper.

No abstract

No abstract

Purpose -There is an emerging consensus that systemically important banks should face stricter regulations and systemic surcharges. To make this latter principle operational the regulator will need to quantify the systemic importance of individual banks. The purpose of this paper is to review the proposed measures of systemic importance from the research community and discuss their merits relative to how a regulator would ideally wish to calibrate surcharges on systemically important banks, and to evaluate how useful proposed measures of the systemic importance of financial institutions will be to regulators. Design/methodology/approach -The author reviews the main contributions to the research literature and discusses their relevance for the problem faced by regulators. Findings -There are five main caveats that make the proposed measures of systemic importance less useful for regulators. Practical implications -The proposed measures may help identify relevant aspects of systemic importance, but the regulators will need to construct their own measures for practical use. Originality/value -The paper provides a critical review of a research literature that could potentially have large practical implications.

No abstract