During the period 1993–2006 the Central Bank of Jordan (CBJ) undertook a series of
measures to deregulate its banking system. Key procedures included the removal of
restrictions on interest rates, expansion of scope of banks' products and services, lifting
of restrictions on foreign exchange transactions and the reduction of barriers to entry of
foreign investors and foreign banks. The main aims of deregulation were to promote a
diversified, efficient and competitive banking system in order to improve resource
allocation, financial viability and operational flexibility.
A data set from the CBJ comprising all the Jordanian banks, covering the time period
1993–2006 was used to examine whether the efficiency of Jordanian banks has
improved (or changed) over this time period. To this end, a parametric approach,
stochastic frontier analysis (SFA), and a nonparametric approach, data envelopment
analysis (DEA), was used to measure the efficiency scores of Jordanian banks over the
period 1993–2006. [Continues.]
A Doctoral Thesis. Submitted in partial fulfilment of the requirements for the award of the degree of Doctor of Philosophy at Loughborough University.