Does Basel Compliance Matter for Bank Performance?

42 Pages Posted: 2 Jun 2015

See all articles by Rym Ayadi

Rym Ayadi

HEC Montreal ; HEC Montreal

Sami Ben Naceur

International Monetary Fund (IMF)

Barbara Casu

City University London - The Business School

Barry Quinn

Queen's University Management School

Date Written: May 2015

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 enchances 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) 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.

Keywords: Banks, Basel Core Principles, Bank compliance, Bank supervision, Bank regulations, BCP, Efficiency, Regulatory Compliance, bank performance, interest, banking, capital, operating efficiency, accounting, risk

JEL Classification: C24, G21, G18

Suggested Citation

Ayadi, Rym and Ayadi, Rym and Ben Naceur, Sami and Casu, Barbara and Quinn, Barry, Does Basel Compliance Matter for Bank Performance? (May 2015). IMF Working Paper No. 15/100, Available at SSRN: https://ssrn.com/abstract=2613299

Rym Ayadi (Contact Author)

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada

Sami Ben Naceur

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Barbara Casu

City University London - The Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Barry Quinn

Queen's University Management School ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

HOME PAGE: http://www.barryquinn.com

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