Banking Efficiency in Emerging Market Economies

This working paper is produced for discussion purpose only. These working papers are expected to be published in due course, in revised form, and should not be quoted or cited without the author's written permission. I am grateful without implication to Tiantian Zhang (PhD candidate Cardiff University) and Momna Saeed (SBP) for able research assistance in the production of this paper. 2 1. Introduction Bank efficiency is not the sort of subject that sets the pulse racing or the heart beating faster. On the surface the subject sounds dry and could put even the most ardent accountant or banker to sleep. Certainly, efficiency is not the hottest topic in banking in the current economic climate. Improved risk management, stronger capital adequacy, regulation, and banker " s remuneration stand higher in the scale of importance following the public opprobrium of bankers in the West. However, I hope to show that not only is this subject worth exploration in its own right but there is much insight that can be gleaned from its study that tells us something about the banking market in question.