Date of Award
Bachelor of Arts
Professor Shelton Schmidt
Efficiency Analysis, Data Envelopment Analysis, Banking, Finance, Financial Crisis
The world’s financial system is one of the globe’s most powerful structures, however the institutions that make up this network of banking firms are certainly not immune to the pressures of market globalization and technical innovation that drive change within the financial landscape. In order to exist within such an environment, the world’s largest commercial banks must constantly reevaluate the ways in which they function in order keep pace in the competitive market. The objective of this paper is to examine the efficiency of ten of the world’s largest commercial banks during the period spanning from 2006 to 2015. Utilizing a data envelopment analysis (DEA) output oriented model this study explores how these banking firms navigated the tumultuous landscape that was created at the hands of the most recent financial crisis. The study not only focuses on firm behavior during the crisis itself but the years surrounding the financial collapse as well, keying in on relationships between banking practices, and firm efficiency during a time of unethical conduct in the financial realm. The results show that the vast majority of banks reached peak efficiency following the crisis years (2007-2008) with a number of banks experiencing their lowest levels of technical efficiency during the crisis itself. Furthermore the most efficient banks in the sample were responsible for some of the era’s largest acquisitions, and there was no obvious trend that surfaced concerning the efficiency of domestic banks versus the efficiency of foreign banks. Coupling these results with the causes and implications of the globe’s most recent financial crisis will hopefully allow for the prevention of such an event in the future.
Coffey, Devin, "Banking Efficiency within the World’s Largest Banks: Application of Data Envelopment Analysis to the Global Financial Crisis of 2008" (2018). Honors Theses. 1635.