... technique on a data set of 32 banks from 2000 to 2015. The data envelopment analysis is used to compute profit efficiency scores with credit risk accounted for. Findings The results suggest that income diversification decreases profit, profit efficiency and financial stability. The impact on profit...

... rather than capital market development should be a priority, alongside with monitoring inflation. Originality/value The paper provides an unbiased analysis of the causal relationship between the banking sector and the capital market. GMM Data envelopment analysis Financial market Banking...