| This dissertation deals with the microeconomic efficiency of the Chilean financial institutions in the period 1973-1985, during which a neoconservative financial reform was implemented. The analysis is done keeping in mind that one of the main objectives of this reform was to increase financial intermediation efficiency.; First, the theoretical presumptions, the explicit objectives and the main contents of the reform are described. Then, three aspects of bank operation are considered and analyzed in detail. They are: the allocation of real resources involved in bank activities, i.e., labor and capital; asset management, and particularly, liquidity management and gap management; and finally, the determination of the activity level or the loan portfolio size.; These three aspects, which represent necessary components of any simple but complete theory of the banking firm, are analyzed separately. The same number of theoretical microeconomic models are proposed and then contrasted with the empirical evidence of the Chilean financial system during the period under consideration. The empirical analysis is based on simple descriptive statistics and econometric models. The results show the existence of significant microeconomic inefficiencies dealing with real resource allocation, gap management and the determination of the activity level. It is suggested that these inefficiencies are associated with the way the reform was implemented. It is pointed out that the weak equity base of firms and banks, the transference of bank ownership to economic groups and the operation of banks as dependent and not independent economic units created the conditions for the development of those inefficiencies. |
