Broad category | Traditional efficiency correlates | Proposed correlates for Barnett’s model |
Economic Environment | GDP | GDP |
Size and scope of bank | 1) Total assets 2) HHI based on TA | Total deposits |
Risk management | Standard Deviation of ROA, ROE | Standard deviation of Net income/inputs to production |
Cost management | Interest expenses, Non-interest expenses. | TC/deposits |
Structure of funding | 1) Interbank dep/TA, customer dep/TA, securitized liab/TA, branches per million of TA | Deposits/labor, Deposits/excess reserve, Deposits/material |
Quality of staff | Expense per employee | Same |
Quality of facilities | Expense per branch | Same |
Investment in technology | ATM’s, online banking, new products | ATM and Telecommunication expenditure |