Deregulation and operating efficiency: the case of the Greek banks

Outlines the deregulation of banking in Greece and previous research on measuring banking efficiency. Uses 1993‐1998 data to assess the effects of deregulation on both private and state‐controlled banks. Shows that the state banks were less efficient than the private and that the gap widened during the period for both non‐interest and labour expenses as a proportion of operating income, as the private banks increased their efficiency. Finds the relative efficiency measured by data envelopment analysis supports the greater efficiency of private banks although the difference is only significant at the 5 per cent level for 1996. Compares the four most efficient banks and briefly considers the underlying reasons for the findings.