Efficiency and productivity analysis in banking  In recent times, a significant body of literature has evolved which explores the performance of financial institutions in the wake of financial liberalisation. These studies are essentially micro-economic in nature and seek to analyse the efficiency and productivity of banking systems.
At the level of application, we need to tailor prudential regulations and supervisory practices with an eye both to those varying objectives and to the characteristics of differing groups of banks. This morning I would like to revisit, and develop a bit more, the concept of regulatory and supervisory “tiering” as it pertains to community banks.