Eficiencia en la gestión y quiebra de bancos comerciales estadounidenses durante la crisis financiera de 2007-2009: ¿fue diferente esta vez? - Núm. 43, Julio 2016 - Revista Ecos de Economía: A Latin American Journal of Applied Economics - Libros y Revistas - VLEX 656163377

Eficiencia en la gestión y quiebra de bancos comerciales estadounidenses durante la crisis financiera de 2007-2009: ¿fue diferente esta vez?

AutorPilar B. Alvarez-Franco/Diego A. Restrepo-Tobón
Páginas5-22
Este es un artículo OpenAccess bajo la licencia CC BY(http://creativecommons.org/licenses/by/4.0/).
ISSN 1657-4206 e-ISSN 2462-8107 Vol. 19 No. 42 PP. 4-18 DOI: 10.17230/ecos.2015.40.2
Research Article
Managerial efficiency and failure of u.S.
coMMercial bankS during the 2007-2009
financial criSiS: waS thiS tiMe different?
Eficiencia en la gestión y quiebra de bancos
comerciales estadounidenses durante la crisis
financiera de 2007-2009: ¿fue diferente esta vez?
Pilar B. Alvarez-Francoa Diego A. Restrepo-Tobónb*
Abstract
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 eiciency in
the non-systemic bank failures during the crisis. During previous waves of bank
failures, cost-ineicient banks and banks with relatively less capital or low-qua-
lity assets were more likely to fail. Using data from 2001 to 2010, we show that
profit ineiciency—our proxy for managerial ineiciency— is a robust predictor
of bank failures while cost ineiciency 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 eiciency can be an important managerial indicator in monitoring banks.
Resumen
En comparación con crisis previas, pocos bancos quebraron como resultado de la
crisis financiera estadounidense de 2007-2009. En el presente artículo se inves-
tiga el papel que la eficiencia en la gestión bancaria jugó en la quiebra de bancos
comerciales considerados no-sistémicos. Durante las olas de quiebras bancarias
anteriores, los bancos ineficientes en costos y con baja capitalización o con activos
de baja calidad tenían una mayor probabilidad de quebrar. Usando datos entre
2001 y 2010, en este artículo se utiliza la eficiencia en beneficios para capturar
la eficiencia en la gestión bancaria. Se encuentra que la eficiencia en beneficios
es un predictor robusto de la probabilidad de que un banco quiebre. Contrario
a la literatura previa, se encuentra que la eficiencia en costos no lo es. Además,
la capitalización bancaria perdió poder predictivo en la probabilidad de quiebra
mientras que la calidad de los préstamos aún conserva un alto poder predictivo.
ISSN 1657-4206 e-ISSN 2462-8107 Vol. 20 No. 43 PP. 4-22 DOI:10.17230/ecos.2016.43.1
Key words: Bank Failure, Profit
Efficiency, Hazard Models.
Palabras clave: Quiebra de bancos,
Crisis Bancaria, Eficiencia, Modelo
de Hazard.
JEL classification: D40, G21, L13,
R32
Received: 27/09/2016
Accepted: 18/11/2016
Published: 30/11/2016
a, b. Universidad EAFIT, Escuela de Economía
y Finanzas, Departamento de Finanzas,
Grupo de Investigación en Finanzas y Banca
(GIFyB).
* Autor para correspondencia:
Correo electrónico: drestr16@eafit.edu.co
PP 6 | 91
Ecos de Economía: A Latin American Journal of Applied Economics | Vol. 20 | No. 43 | 2016
Managerial efficiency and failure of U.S. commercial banks during the 2007-2009 financial crisis: was this time different?
Los resultados presentados sugieren que la eficiencia en beneficios puede ser un indicador importante
en la supervisión y el monitoreo de los bancos.
1. Introduction
During and immediately after the 2007-2009 U.S. financial crisis, 322 U.S. commercial banks failed.
The estimated loss for the Federal Deposit Insurance Corporation (FDIC) was $86 billion. Both the
number of bank failures and their associated cost increased tenfold compared to the years between
2000 and 2007. From 1980 to 1989, 1,467 U.S. commercial banks failed (estimated cost $62 billion)
and from 1990 to 1999 this number was 436 (estimated cost $7 billion)1. Despite the severity of the
recent crisis, the number of bank failures was low compared to previous crisis episodes. The natural
question arising from these facts is what was dierent this time around.
In the U.S. the FDIC manages bank failures and is usually appointed as a receiver for failing banks.
The narratives presented in the Material Loss and In-Depth Reviews (MLIR) conducted by the FDIC
Oice of Inspector General indicate that a bank fails mainly because the bank has: 1) inadequate cor-
porate governance; 2) weak risk management; 3) lack of risk diversification/lending concentration; 4)
deteriorating financial conditions; and 5) insuicient capital to continue sound operations2. The risk
management manual of examination policies of the FDIC (the FDIC closure guidelines, henceforth),
includes six factors to assess the soundness of supervised banks: capital adequacy, asset quality,
managerial practices, earnings quality, liquidity position, and sensitivity to market risk. These six
factors are commonly known by the acronym CAMELS. By construction, the proxies for CAMELS
factors have high explanatory power regarding the probability of bank failures in the U.S. since the
FDIC recommends bank closures or prompt corrective actions based on them. Not surprisingly, a
robust finding in the academic literature is that CAMELS components constitute the main factors
influencing the probability that a bank fails (e.g. Cole and Gunther 1995; Wheelock and Wilson 2000;
Cole and White 2012).
According to the FDIC, “the quality of management is probably the single most important element
in the successful operation of a bank” (FDIC guidelines, 2005, p. 4.1.1). However, out of the six CA-
MELS factors, the managerial component is usually overlooked in the literature since the assessment
of managerial practices is not readily amenable to econometric or statistical analysis, in part, because
the definition of managerial practices is broad and vague.
In economics, eiciency is defined broadly as the ratio between outputs and inputs. It describes
a relationship between ends and means and is measured by comparing their relative values, Heyne
(2008). Consistent with this definition, managerial eiciency can be defined as the ability to achieve
the firm’s objectives (ends) using the minimum level of resources (means). Ideally, it can be measured
by comparing the value of resources used with the value of the outputs produced. However, in applied
work this is a diicult task. Bates and Sykes (1962) argue that managerial eiciency necessarily should
be reflected in the profitability of firms: more managerial-eicient firms should be more profitable.
Jovanovic (1982) states that in a market economy profits represent the reward for greater managerial
eiciency. Following Bates and Sykes and Jovanovic, we measure managerial eiciency using profit
eiciency as a proxy. Profit eiciency is a financial performance measure of the distance between
1 Data on commercial banks’ failure are available at the Federal Deposit Insurance Corporation (FDIC) (http://www2.fdic.gov/hsob/
index.asp).
2 See (Ragalevsky and Ricardi, 2009) and the MLIR reports at https://www.fdicig.gov/mlr.shtml. The MLIR are conducted only when the
FDIC insurance funds suffer material losses as a consequence of a bank failure.

Para continuar leyendo

Solicita tu prueba

VLEX utiliza cookies de inicio de sesión para aportarte una mejor experiencia de navegación. Si haces click en 'Aceptar' o continúas navegando por esta web consideramos que aceptas nuestra política de cookies. ACEPTAR