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Article
Bank Efficiency and the Effectiveness of Monetary Policy
Contemporary Economic Policy
  • Michael R. Jonas, University of San Francisco
  • Sharmila K. King, University of the Pacific
Document Type
Article
Department
Economics
DOI
10.1111/j.1465-7287.2008.00102.x
Publication Date
10-1-2008
Disciplines
Abstract
Advances in information technology and bank consolidation have altered the way banks operate by necessitating that banks control costs and provide services efficiently to remain competitive. Given the unique role bank operations play in the transmission of monetary policy, a key unresolved question is whether bank efficiency alters monetary policy outcomes. Using a stochastic frontier approach to measure cost-efficiency and panel data of U.S. bank balance sheets, we show that banks with greater cost-efficiency are more sensitive to monetary shocks.
Citation Information
Michael R. Jonas and Sharmila K. King. "Bank Efficiency and the Effectiveness of Monetary Policy" Contemporary Economic Policy Vol. 26 Iss. 4 (2008) p. 579 - 589 ISSN: 1074-3529
Available at: http://works.bepress.com/sharmila-king/3/