ABSTRACT
Chapter 4 provides a detailed discussion of how Malaysian banks reacted to the Asian Financial Crisis and measures how effectively the bank consolidation and merger exercise improved the banks' level of efficiency following the crisis period. Then, the chapter evaluates how effective the bank bailout exercises carried out in US during the GFC period were. We used the DEA nonparametric approach to estimate the bank's level of technical, profit, and cost efficiency. We further decomposed the technical efficiency into scale and pure technical estimation to evaluate the effectiveness of the Malaysian and US banks merger exercise. We further compared the differences and the outcomes of the bank bailout policy in Malaysia and the US to shed some insight on the efficacy of the implementation of bank bailout policy in developed and developing economies.
