Financial institutions are great motivator in ensuring money navigation to the needy from the person who have plethora of that, especially for the countries of the third world alike the developed nations (Harker & Zenios, 2008). In developing economy and overall money system their contributions are of no denying. Financial institutions in the Asia pacific region are doing exactly the same. Financial institutions like large retail banks (e.g. Barclays, Citi NA), segmented financial institutions like micro finance institutions are providing financial services to the people of that region. Apart from this there are several insurance companies who are operating their business in ...view middle of the document...
These organizations helping the nations in providing overview of the market conditions and economy. As they are directly indulged to the people they are quite capable of learning the notions of the people (the demand of the people in terms of money) and therefore they are in the task to supply the money circulation. They are circulating the remittance to the people and to the nations as well from the other countries. This is helping the economy of those nations grow and augmenting the living of the people as well (Kumbhakar, Lozano-Vivas, Lovell, & Hasan, 1999). That is why it can be said that the performance of the financial institutions are of great importance. Inspired to this motif the researcher has undertaken the initiatives to conduct a research on this matter.
Financial institutions ensures money navigation in a nation’s border or outside the border of that nation (Harker & Zenios, 2008). For a developing economy and for the overall money system of the developed and underdeveloped nations alike their contributions are huge (Todd, 1998). Different financial institutions provides different financial services to the people (Kumbhakar, Lozano-Vivas, Lovell, & Hasan, 1999). These are like banks, non-bank financial institutions, segmented financial institutions etc. Apart from this there are several insurance companies which reduces risks of the business organizations. These types of financial institutions provides world class banking services to the people (Harker & Zenios, 2008).
Large number of studies has been used to measure the performance of financial institutions. But among the measurements two type of the analysis Parametric (stochastic frontiers analysis) or non-parametric analysis (such as DEA) have made a great impact on the performance measurement of the financial institutions of the Asia pacific region. Strum & William (2004) and Havrylchyk (2006) have used DEA (Data Envelopment Analysis) and found that new foreign banks are performing more efficiently as compared to the domestic banks in Australia and Poland respectively. On the other hand Barr (2002) has used four outputs variable income, interest income, assets, noninterest incomes and used five inputs variables, salary expense, fixed assets, interest expense, noninterest expenses and premises to analyze the performance and efficiency of US commercial bank from 1984 to 1998. In 2010 IDE-JETRO has used both of the methods to analysis the performance of financial institutions in Bhutan. Yet it can be said that measuring the performance of economy is extremely difficult in the environment of modern economies because they are based on the consumption and production.
In Asia-pacific region governments have higher involvement in financial institution as compared to the Europe banks, South American banks, and North American banks and due to government’s higher involvement bank face losses in shape of lowering the bank’s share prices...