ABSTRACT
The economic literature pays a great deal of attention to the performance of banks, expressed in terms of competition, concentration, efficiency, productivity and profitability. The key reason is that banks are seen as special, given their pivotal role in providing credit to enterprises. Banks and other financial institutions are also regarded, particularly in the aforementioned phenomena, particularly, competition and efficiency, as difficult if not impossible to observe directly, since information on output prices (or credit rates) is rare and figures on the costs of banking products are unavailable. The literature has tried to measure these unobservable variables by many different methods, none of which, however, has been entirely conclusive or unchallenged. Apart from theoretical shortcomings, a practical problem is that different methods yield different estimates.
