Do capital requirements affect bank efficiency? Evidence from China

Arbeitspapier

This paper contributes to the debate on the effect of capital requirements on bank effieciency. We study the relation between capital ratio and bank efficiency for Chinese banks over the period 2004?2009, taking advantage of the profound regulatory changes in capital requirements that occurred during this period to measure the exogenous impact of an in-crease in the capital ratio on banks' cost efficiency. We find that such an increase has a positive effect on cost efficiency, the size of which depends to an extent on the bank's ownership type. Our results therefore suggest that capital requirements can improve bank efficiency.

Object Details

• ISBN: 978-952-6699-47-9
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: BOFIT Discussion Papers ; No. 28/2013

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation
• Subject: bank ; capital requirements ; efficiency ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pessarossi, Pierre ; Weill, Laurent
• Event: Veröffentlichung
• (who): Bank of Finland, Institute for Economies in Transition (BOFIT)
• (where): Helsinki
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/212783
• Last update: 10.03.2025, 11:44 AM CET