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# **Table 1. Bank Performance and Regulation in 1999, Survey I**

|`------------------------------------`<br>`------------------------------------`|`---------------`<br>`Bank`<br>`Development`<br>`---------------`|`------------`<br>`Interest`<br>`Margin`<br>`------------`|`--------------`<br>`Overhead`<br>`Costs`<br>`--------------`|`---------------------`<br>`Nonperforming`<br> <br>`Loans`<br>`---------------------`|
|---|---|---|---|---|
|<br>`Capital Regulatory Index`|<br>`-0.0333`<br>`(0.0252)`|<br>`0.00194`<br>`(0.00323)`|<br>`0.000398`<br>`(0.00177)`|<br>`-0.0186**`<br>`(0.00888)`|
|`Private Monitoring Index`|`0.0564**`<br>`(0.0267)`|`-0.00743**`<br>`(0.00295)`|`-0.00697***`<br>`(0.00162)`|`-0.0299***`<br>`(0.00787)`|
|`Official Supervisory Power Index`|`0.00701`<br>`(0.0151)`|`0.00217`<br>`(0.00196)`|`0.000176`<br>`(0.000950)`|`0.00511`<br>`(0.00486)`|
|`Entry Requirements Index`|`0.00440`<br>`(0.0223)`|`0.00493*`<br>`(0.00269)`|`0.00405**`<br>`(0.00176)`|`0.00431`<br>`(0.0104)`|
|`Restrictions on Activities Index`<br>`------------------------------------`|`-0.0621**`<br>`(0.0246)`<br>`---------------`|`0.00504**`<br>`(0.00199)`<br>`------------`|`0.00117`<br>`(0.00140)`<br>`--------------`|`0.00126`<br>`(0.00789)`<br>`------------------------`|
|<br>`Observations`<br>`-----------------------------------`|<br>`66`<br>`-------------`|<br>`72`<br>`------------`|<br>`72`<br>`-------------`|<br>`68`<br>`-----------------------`|

``` Notes: This table presents four regressions, where each column reports the findings from an OLS regression. The dependent variables, measured in 1999, are: Bank Development equals claims on the private sector by deposit money banks as a share of GDP; Interest Margin equals net interest income divided by total bank assets; Overhead Costs equals total bank overhead costs as a share of total bank assets; and, Nonperforming Loans equals officially reported nonperforming loans as a share of total banks assets. The regulatory indexes are measured in 1999: Capital Regulatory Index measures the extent and stringency of regulatory requirements; Private Monitoring Index measures the degree to which regulatory policies encourage and facilitate private sector monitoring of banks; Official Supervisory Power Index measures the extent to which official supervisory agencies have the authority to take specific actions to prevent and correct problems; Entry Restrictions Index measures the number of specific legal requirements for obtaining a banking license; and Restrictions on Activities Index measures regulatory restriction on the degree to which banks can engage in securities, insurance, and real estate activities plus restrictions on banks owning and controlling nonfinancial firms. Though unreported, the regressions also control for the legal origin of each country by including three dummy variables for Common, French civil, and German civil law countries, as well as a constant term. Heteroskedasticity-consistent standard errors are in parentheses under the estimated coefficients. To designate statistically significant benchmarks, *** indicates significance at the 0.01 level, ** at the 0.05 level, and * at the 0.10 level.
```