The paper analyzes the efficiency and profitability of Japanese banks from 2000-06. It uses a non-parametric approach, the data envelopment analysis (DEA) to analyze banks' cost and revenue efficiency. The results show that the performance of Japanese banks has steadily improved since 2001, but there are significant differences within the banking sector, with regional banks being less cost and revenue efficient relative to both City and Trust banks. While Japanese bank profitability is low compared to that in other advanced countries, there is considerable potential for efficiency gains, particularly through increased cost-sharing arrangements among regional banks, consolidation of regional banks with major or other regional banks, and the creation of bank consortia to pool resources for asset and risk management.Most studies have focused on the use of parametric and non-parametric techniques to analyze cost and overall technical efficiency of Japanese banks. 5Fukuyama (1993) found that the majority of big (City) banks operated close to theiranbsp;...
|Title||:||Analysis of the Efficiency and Profitability of the Japanese Banking System (EPub)|
|Publisher||:||International Monetary Fund - 2008-03-01|