Do Bank Deposits Require a Special Treatment: An Analysis of the Efficiency of German Cooperative Banks

25 Pages Posted: 15 Jan 2016

See all articles by Armin Varmaz

Armin Varmaz

University of Applied Sciences Bremen

Andreas Varwig

University of Applied Sciences Bremen

Date Written: January 14, 2016

Abstract

Banking efficiency has been one of the most often studied subjects since the introduction of Data Envelopment Analysis. However, there is no broadly accepted model specification yet. Recently a new model, particularly addressing the ambiguous role of deposits in banking, has been presented by Holod and Lewis (2011). The objective of this article is to evaluate the applicability of this new model. Analyzing panel data on 1172 German cooperative banks in the period 1991-2009, this article finds the special treatment of deposits to be a valuable amendment to the evaluation of banking efficiency. However, the model of Holod and Lewis (2011) requires assumptions which cannot be made for any market.

Keywords: Bank efficiency, DEA, Input-output models, Cooperative banks

JEL Classification: G21, C67

Suggested Citation

Varmaz, Armin and Varwig, Andreas, Do Bank Deposits Require a Special Treatment: An Analysis of the Efficiency of German Cooperative Banks (January 14, 2016). Available at SSRN: https://ssrn.com/abstract=2715511 or http://dx.doi.org/10.2139/ssrn.2715511

Armin Varmaz (Contact Author)

University of Applied Sciences Bremen ( email )

Neustadtswall 30
Bremen, 28199
Germany

HOME PAGE: http://www.hs-bremen.de/internet/de/hsb/struktur/mitarbeiter/varmaz/

Andreas Varwig

University of Applied Sciences Bremen ( email )

Neustadtswall 30
Bremen, 28199
Germany

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