The Chinese banking system, characterized by massive government intervention, poor asset quality and low capitalization, has started a reform process based on the three main pillars: (i) bank restructuring, through the cleaning-up of non-performing loans (NPLs) and public capital injections,...

‘The Great Recession’ was preceded by a prolonged period of high growth accompanied by low and stable inflation, the so called ‘The Great Moderation’. In Spain, a similar pattern was observed: in fact, potential growth estimates were trending upwards, implying that output gaps remained...

This paper analyzes empirically what explains the low profitability of Chinese banks for the period 1997-2004. We find that better capitalized banks tend to be more profitable. The same is true for banks with a relatively larger share of deposits and for more X-efficient banks. In addition, a...