Performance of Financial Services in Luxembourg - PERFILUX
Coordinating Institution:
Université du Luxembourg
Contracting Partner(s):
Banque Centrale du Luxembourg ,
Statec ,
Luxembourg Finance School - LSF (L)
Other Partner(s):
University of Louvain (B) ,
University of Kiev (Russia) ,
University of Malaga (E)
From: 01/10/2007
To: 30/09/2010
Budget: 499,361.00€
Contact(s):
Guarda Paolo
,
Michel Pierre-Armand
Summary
The Perfilux project has three objectives (i) to analyse alternative output measures in financial services (ii) to study productivity and efficiency developments in Luxembourg’s banking sector (iii) to analyse the links between Luxembourg’s financial services industry and its other sectors of production as well as with financial services industries in other countries. The two full-time researchers on this project presented findings in seminars at BCL, LSF and STATEC. One study applies nonparametric methods to measure efficiency in Luxembourg banks (distance from the best-practice frontier). It quantifies uncertainty around efficiency scores by bootstrap methods and uses a consistent second-stage regression to study sources of efficiency.
The other study applies parametric methods to estimate productivity change, and distinguish efficiency change (banks shifting relative to best practice) and technical change (shifts in the best-practice frontier). This paper also distinguishes between the technology of large and small banks and tests whether a given financial product acts as an input or an output in production. Work continued on economies of scope (joint production of several outputs). A background paper (near completion) describes institutional developments in the Luxembourg banking industry and examines differences between foreign bank subsidiaries and branches in Luxembourg.
Two non-technical summaries of forthcoming BCL working papers were published (in French) in the BCL bulletin 2009/2 and 2009/3. Another paper presented in 2008 was selected for publication in a conference volume. Professors Lozano-Vivas and Zelenyuk visited Luxembourg separately to begin working on joint papers with Perfilux researchers. Professor Simar is collaborating on a third Perfilux paper. Discrepancies in results from different approaches prompted the creation of a joint STATEC/BCL working group to compare the impact of historical cost and fair value accounting practices on measures of bank output. The group submitted a report to the project Steering Committee.
Publications
- Guarda & Rouabah (2009) “Bank Productivity and Efficiency in Luxembourg: Malmquist indices from a parametric output distance function,” in Balling, Gnan, Lierman & Schoder (eds.) Productivity in the Financial Services Sector, Vienna: SUERF Studies 2009/4.
- Guarda, Rouabah & Vardanyan (2009a) “Efficacité et productivité dans le secteur bancaire luxembourgeois : une approche par les fonctions de distance directionnelles,” (résumé non-technique) BCL bulletin 2009/2
- Guarda, Rouabah & Vardanyan (2009b) “Efficiency and productivity in Luxembourg’s Banking Sector: a stochastic directional distance function approach,” forthcoming BCL working paper
- Curi, Guarda & Zelenyuk (2009a) “Spécialisation, filiales et succursales de banques étrangères au Luxembourg : une analyse des comptes financiers,” (résumé non-technique) BCL bulletin 2009/3
- Curi, Guarda & Zelenyuk (2009a) “Specialisation of foreign bank subsidiaries and branches in Luxembourg: an analysis of quarterly financial accounts,” forthcoming BCL working paperCuri & Guarda (2009b) “Does Banking Production Model Influence Bootstrapped DEA Efficiency Measures? An application to quarterly data of Luxembourg banks,” mimeo