Does Basel Compliance Matter for Bank Performance?

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

Research output: Contribution to journalArticle

21 Citations (Scopus)
720 Downloads (Pure)

Abstract

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 enhances 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. J. Econ. 136 (1), 31) 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.
Original languageEnglish
Pages (from-to)15-32
Number of pages18
JournalJournal of Financial Stability
Volume23
Early online date30 Dec 2015
DOIs
Publication statusPublished - Apr 2016

Keywords

  • BCP;Efficiency;Regulatory Compliance

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