Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153570
Authors: 
Humphrey, David
Year of Publication: 
2009
Series/Report no.: 
ECB Working Paper 1136
Abstract: 
Payment scale economies affect banking costs, competition in payment services, and pricing. Our scale measure relates operating cost to physical measures of European banking "output", finding large economies. This differs from relating total cost to the value of balance sheet assets (the conventional approach). Interest expenses are excluded since differences here are primarily due to mix, not scale. Also, since standard indicators of competition can give inconsistent results, a revenue-based frontier measure is developed and applied to European banks, with little difference evident across countries. Existing differences in bank prices (EC report) are associated with small differences in competition.
Subjects: 
Bank competition
European banks
frontier analysis
Payment scale economies
JEL: 
E41
C53
Document Type: 
Working Paper

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