Mohamed E. CHAFFAI, Michel DIETSCH
The financial deregulation that occurred in the 1980s changed the nature of the competition in the European banking industry and provoked an acceleration of technological progress. Many observers have argued that these changes have created excess capacity. However, only a few studies have attempted to verify the existence of excess capacity in the banking sector (Frydl (1993), Dietsch (1994), Davis and Salo (1998)). The first objective of this paper is therefore to consider the measurement issue of capacity-utilization. We estimate whether there actually was excess capacity in the banking industry of three main European countries – France, Germany and Italy – during the 1990s.
Updated on: 03/19/2019 16:57