%0 Journal Article
%T Managerial efficiency and failure of U.S. commercial banks during the 2007-2009 financial crisis: was this time different?
%A Diego A. Restrepo-Tob¨®n
%A Pilar B. ¨¢lvarez-Franco
%J -
%D 2016
%R https://doi.org/10.17230/ecos.2016.43.1
%X 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¡ªour proxy for managerial inefficiency¡ª 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
%U http://publicaciones.eafit.edu.co/index.php/ecos-economia/article/view/4180