Band 11, Heft 3 -

Before 1900, there were few foreign banks in the Ottoman Empire. The most important foreign bank was the Imperial Ottoman Bank. Many rival foreign banks established a presence over time, which could have undermined the power of the Imperial Ottoman Bank due to greater competition. This article examines how rival foreign banks affected the Imperial Ottoman Bank branches, using data on profits of these branches between 1895 and 1914. Empirical findings do not indicate that rival bank branches were related to lower profits for Imperial Ottoman Bank branches in the respective markets.

This study contributes to the banking efficiency literature by using a three input–five output stochastic frontier translog cost function specification to investigate cost efficiency, scale economies, and technological progress in the Egyptian banking sector. The study analyzes the efficiency of Egyptian banks in the period 2000–2006 which witnessed major regulatory and structural changes. The analysis is based on a panel data of 34 commercial banks representing about 75% of the banking sector in Egypt. The results show that the banks suffer significantly from internal X-inefficiency with an average cost reduction potential of 12%. Increasing economies of scale are found to exist up to a bank size of about EGP30 bn, implying that all but the four largest banks in Egypt could reduce their average costs by growth. Surprisingly, Egyptian commercial banks did not benefit from technological change; instead they faced a negative dynamics of the cost frontier. Further regression analysis conducted to explain the different efficiency levels of the banks revealed a positive impact of size, growth, and merger activities on efficiency, which implies bigger is better for Egyptian Banks.

The debate on bank capital regulation has in recent years devoted specific attention to the role that bank loan loss provisions play as a part of the overall minimum capital regulatory framework. Using data for 1996–2011, we find evidence in favor of both capital management and signaling behavior by GCC banks. Islamic banks appear to engage less in such behavior as compared to their non-Islamic counterparts.

Weak economic statistics in Lebanon impede economic analysis and decision making. This paper presents a new coincident index and a leading index for the Lebanese economy. A new methodology, based on the National Bureau of Economic Research–Conference Board approach, was used to construct these indexes. The indexes can be used as monthly proxies for the evolution of real gross domestic product with a relatively small time lag (four to five months). Notwithstanding the relatively small sample period, the results reveal promising statistical properties that should make these new indexes valuable coincident and leading (one-year ahead) indexes for analyzing the dynamics of the Lebanese economy. However, given limitations on the length of the gross domestic product time series in Lebanon, the accuracy of these indexes in tracking the business cycle of the Lebanese economy is expected to improve over time as more data points become available.