Managerial Efficiency and Failure of U.S. Commercial Banks During the 2007-2009 Financial Crisis: Was this Time Fifferent?

Publicado en

  • Revista Ecos de Economía


  • Compared with previous crises few banks failed as a result of the U.S. financial crisis of 2007-2009. We investigate the role played by managerial efficiency in the non-systemic bank failures during the crisis. During previous waves of bank failures, cost-inefficient banks and banks with relatively less capital or low-quality assets were more likely to fail. Using data from 2001 to 2010, we show that profit inefficiency-our proxy for managerial inefficiency- is a robust predictor of bank failures while cost inefficiency is unrelated to them. In addition, capital adequacy lost importance in predicting non-systemic bank failures during the crisis while loan quality remained a strong predictor. Our results suggest that profit efficiency can be an important managerial indicator in monitoring banks.

fecha de publicación

  • 2016

Líneas de investigación

  • Bank Failure
  • Hazard Models
  • Profit Efficiency

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