For the past 20 years, the then prevailing circumstances prompted many countries to liberalize their financial sector through deregulation. Deregulation and liberalization had a major impact on increasing the productivity and efficiency in various industries and also in the banking sectors in some Eastern and Central European counties as well as in China. Although, the primary goal of liberalization and deregulation has been to improve efficiency, earlier results have been mixed and the short-term effects of liberalization have been discouraging.
For example, Berg, Forsund and Jansen (1991) found that in Norway during 1980-89 the productivity of banks declined initially but eventually rose. Zaim (1995) reported efficiency gains in Turkish banks after the 1980 liberalization programme. Leighter and Lovell (1998) investigated the Thai banking industry from both the banks and the government’s perspective from 1989 to 1994. They found that the average Thai bank had a rapid productivity gain based on its own local objectives, but during this period productivity gains from the liberalization program could not help in advancing the government objectives (that is, overall economic growth). Korea launched a major liberalization drive between 1980 and 1994 and found that most Korean banks became more efficient and experienced major gains during this period when the government controls were lifted. On the other hand, it was found that in the United States (Humprey and Puttey, 1997) and in Spain economy (Griefeell and Lovell, 1997) deregulation resulted in a decline in efficiency.
ave continuously updated upon their management practices through such studies.
Message edited by author 2010-01-23 11:29:16. |
