http://www.bis.org/cbhub/list/author/author_1826/index.rss Research hub papers by author Phil Molyneux en http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1211.pdf European Central Bank Working papers by Franco Fiordelisi, David Marqués-Ibáñez, Phil Molyneux Efficiency and risk in european banking, 2010-06-25T12:43:59Z We analyze the impact of efficiency on bank risk. We also consider whether bank capital has an effect on this relationship. We model the inter-temporal relationships among efficiency, capital and risk for a large sample of commercial banks operating in the European Union. We find that reductions in cost and revenue efficiencies increase banks’ future risks thus supporting the bad management and efficiency version of the moral hazard hypotheses. In contrast, bank efficiency improvements contribute to shore up bank capital levels. Our findings suggest that banks lagging behind in their efficiency levels might expect higher risk and subdued capital positions in the near future. Efficiency and risk in european banking, 2010-06-25T12:43:59Z ECB Full text http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1211.pdf David Marqués-Ibáñez Franco Fiordelisi Phil Molyneux Franco Fiordelisi, David Marqués-Ibáñez, Phil Molyneux 2010-06-10 European Central Bank Working papers C23 D24 E44 G21