Faculty Scholarship 1994 - Present

Impact of Regulatory Changes on the Performance of Traditional Banks

By utilizing a non-parametric approach, we investigate the changes in the performance of the traditional Turkish banks in an era of financial liberalization. We hypothesize that the new liberal environment along with heightened competition from new banks coming from internal and external markets will discipline the traditional banks in resource management and in looking for new ways to expand bank outputs, resulting in higher productivity and efficiency in these banks. Consisted with the expectations, we found that there is a significant upward trend in the productivity and efficiency of the traditional Turkish banks over the period under the study, implying that the relaxation of regulations and entry barriers may affect bank performance positively.