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Cited by 1,985

The DOI matches its Crossref record.

Problem loans and cost efficiency in commercial banks

Open access
Berger, Allen N., DeYoung, Robert·1997·Journal of Banking & Finance
DOI 10.1016/s0378-4266(97)00003-4
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Abstract

This paper addresses a little examined intersection between the problem loan literature and the bank efficiency literature. We employ Granger-causality techniques to test four hypotheses regarding the relationships among loan quality, cost efficiency, and bank capital. The data suggest that problem loans precede reductions in measured cost efficiency; that measured cost efficiency precedes reductions in problem loans; and the reductions in capital at thinly capitalized banks precede increases in problem loans. Hence, cost efficiency may be an important indicator of future problem loans and problem banks. Our results are ambiguous concerning whether or not researchers should control for problem loans in efficiency estimation.

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Metadata

Authors
Berger, A. N., & DeYoung, R.
Venue
Journal of Banking & Finance
Publisher
Elsevier BV
Published
1997-06
Volume
21
Issue
6
Pages
849-870
ISSN
0378-4266 (ISSN-L)
DOI
10.1016/s0378-4266(97)00003-4
OpenAlex
W2150059822
Cited by
1,985
References
0
FWCI
34.71
Type
journal article
Language
en
Open access
hybrid

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CoChat. (2026). Citation check: Problem loans and cost efficiency in commercial banks. https://app.cochat.ai/papers/10.1016/s0378-4266(97)00003-4
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Berger, A. N., & DeYoung, R. (1997). Problem loans and cost efficiency in commercial banks. Journal of Banking & Finance. https://doi.org/10.1016/s0378-4266(97)00003-4

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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.