IMF bank-restructuring efficiency outcomes: Evidence from East Asia

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Journal Article

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Interim status: Citation only.

Ariff, M., & Can, L. (2009). IMF bank-restructuring efficiency outcomes: Evidence from East Asia. Journal of financial services research, 35(2), 167-187.

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2009 HERDC submission. FoR code: 1502

© Copyright Springer Science + Business Media, LLC 2008


We report new findings on bank efficiency in East Asian countries for the pre- and post-IMF restructuring periods. We find that bank efficiency has improved, but only to the pre-IMF intervention level, and that restructured banks are not more efficient than their unrestructured counterparts. Different restructuring measures have different effects. Bank closures are economically justified, but mergers show short-term efficiency losses. Recapitalization and reprivatization of badly performing banks lead to efficiency improvement, but also increase government ownership. Ease of entry that has allowed for more foreign bank participation results in slightly improved performance of badly performing banks.

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This document has been peer reviewed.