IMPACT OF FINANCIAL REGULATION ON PROFIT EFFICIENCY OF COMMERCIAL BANKS OF NEPAL
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Abstract
The optimal level of banking regulations can help in maintaining an efficient banking system in the nation.
The way in which a company uses its resources helps to determine the success of the company. Taking this fact into consideration, various researchers have focused their study in evaluating the cost efficiency in the banking system. However, there have been several researches which have found that profit efficiency in the banking sector is of higher importance than the cost efficiency. The profit efficiency also considers the revenue side of the business which cost efficiency fails to incorporate.
Description
The financial market intermediaries help to deal with the risks and other uncertainties associated with the financial exchange. They try to solve these problems but these problems are shifted, mitigated, but not completely eliminated by financial intermediation. Therefore, Regulation and supervision of the financial market i.e. banking and financial infrastructure, is curial to the economy. They are necessary to improve the
efficiency of financial markets, which then supports economic growth of the country. Financial Market failure results especially due to the problems associated with the information and externalities.