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dependence in the bank cost efficiency rankings constructed with the revaluations being kept or dropped. We relate this … show that the revaluations are positively associated with (corporate) bank lending. We then find that keeping the … revaluations when estimating bank cost efficiency leads to a misleading conclusion that the credit market is inefficient; we show …
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We study the differential impact of exchange rate volatility on cost efficiency and market structure when banks have non-trivial exposures to foreign currency operations. First, we document that cost efficiency estimates are both severely downward biased by 30% on average and generally not rank...
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