Efficiency assessment of banking systems’ performance

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Globalization processes define the modern trends in world economic development, including both international financial markets and the banking systems of different countries. The study aims to evaluate the efficiency of the banking systems of Ukraine and 17 European countries in order to choose the appropriate measures, concerning its increasing. The Data Envelopment Analysis (DEA) was chosen as a tool for evaluating the efficiency of the banking systems; the calculations were made using the Banxia Frontier Analyst software. Also, the BBC and CCR models of linear programming were used to define the existing relationship between the studied indicators. As a result of the study, the groups of efficient and inefficient banking systems were identified, which allowed determining the existing reserves, possible managerial tools and decisions for improving the inefficient banking systems’ performance. Besides, graphical interpretation of the current position (rank) of certain country bank system in relation to other countries’ banking systems was presented. The developed approach is aimed at improving bank management at the macro level and enhancing the efficiency of banking systems.

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    • Figure 1. Scree plot based on principal component analysis results
    • Figure 2. Input of basic data for assessing the efficiency of the banking sector in Europe and Ukraine as of 2020
    • Figure 3. Window for selecting for building an input-oriented BCC model and the output-oriented CCR model
    • Figure 4. Functioning efficiency of banking systems of 17 European countries and Ukraine as of 2020, calculated using the DEA BCC model
    • Figure 5. Distribution graph of assessing the efficiency of banking systems of 17 European countries and Ukraine as of 2020 for the DEA BCC model
    • Figure 6. Potential for improving the efficiency of banking systems in 17 European countries and Ukraine as of 2020 for the DEA BCC model
    • Figure 7. Efficiency of banking systems in 17 European countries and Ukraine as of 2020 calculated based on the DEA CCR model
    • Figure 8. Distribution of assessments of the banking system’s effectiveness in 17 European countries and Ukraine as of 2020 for the DEA CCR model
    • Figure 9. Potential for improving the efficiency of banking systems in 17 European countries and Ukraine as of 2020 for the DEA CCA model
    • Figure C1. Analysis of the results and potential for improving the efficiency of the French banking system as of 2020 for the BCC model
    • Figure C2. Analysis of the results and potential for improving the efficiency of the banking system of the Slovak Republic as of 2020 for the BCC model
    • Figure C3. Analysis of the results and potential for improving the efficiency of the Portuguese banking system as of 2020 for the BCC model
    • Figure C4. Analysis of the results and potential for improving the efficiency of the Finnish banking system as of 2020 for the BCC model
    • Figure C5. Analysis of the results and potential for improving the efficiency of the Spanish banking system as of 2020 for the BCC model
    • Table A1. Factors of influence on the efficiency of the Ukrainian banking system for 2000–2020
    • Table B1. Data for calculations based on the DEA method in the European countries as of 2020
    • Table D1. Efficiency upside potential of banks for some European countries, calculated based on the BCC model and the CCR model of DEA
    • Data curation
      Maxim Korneyev, Volodymyr Dzhyndzhoian, Natalia Nebaba, Sergiy Voytov
    • Formal Analysis
      Maxim Korneyev, Volodymyr Dzhyndzhoian, Natalia Nebaba, Sergiy Voytov
    • Investigation
      Maxim Korneyev, Ivan Berezhniuk, Volodymyr Dzhyndzhoian, Natalia Nebaba, Sergiy Voytov
    • Resources
      Maxim Korneyev, Volodymyr Dzhyndzhoian, Natalia Nebaba, Sergiy Voytov
    • Validation
      Maxim Korneyev, Volodymyr Dzhyndzhoian
    • Writing – original draft
      Maxim Korneyev, Ivan Berezhniuk, Volodymyr Dzhyndzhoian
    • Writing – review & editing
      Maxim Korneyev, Volodymyr Dzhyndzhoian, Natalia Nebaba, Sergiy Voytov
    • Conceptualization
      Ivan Berezhniuk, Volodymyr Dzhyndzhoian
    • Funding acquisition
      Ivan Berezhniuk
    • Methodology
      Ivan Berezhniuk, Volodymyr Dzhyndzhoian
    • Project administration
      Ivan Berezhniuk
    • Software
      Ivan Berezhniuk, Volodymyr Dzhyndzhoian
    • Supervision
      Ivan Berezhniuk, Natalia Nebaba, Sergiy Voytov
    • Visualization
      Natalia Nebaba, Sergiy Voytov