This handbook provides an overview and analysis of state-of-the-art research in banking written by leading researchers in the field. It strikes a balance between abstract theory, empirical analysis, and practitioner and policy-related material.

We investigate the sources of recent changes in the performance of U.S. banks using concepts and techniques borrowed from the cross-section efficiency literature. Our most striking result is that during 1991-1997, cost productivity worsened while profit productivity improved substantially,...