1. II Jornadas de Integración Económica. Grupo INTECO. Valencia, 1-2 de Diciembre de 2005. Comments on: ‘Efficiency and market power in Spanish banking’ Andrés J. Picazo Universitat de València II Jornadas de Integración Económica. Grupo INTECO. Valencia, 1-2 de Diciembre de 2005. Comments on: ‘Efficiency and market power in Spanish banking’ by R. Färe, S. Grosskopf and E. Tortosa-Ausina Andrés J. Picazo Universitat de València

2. II Jornadas de Integración Económica. Grupo INTECO. Universidad de Valencia, 1-2 de Diciembre de 2005. Efficiency and market power in Spanish banking Comments on ‘Efficiency and market power in Spanish banking’, by R. Färe, S. Grosskopf and E. Tortosa-Ausina. Aim of the paper:  The manuscript explores how efficiency is related to profitability in Spanish banking.  In a first stage, both cost and revenue efficiencies are computed using Data Envelopment Analysis.  In a second stage, the relationship between efficiency and profitability (return-to-the-dollar) is investigated using non-parametric procedures.

3. II Jornadas de Integración Económica. Grupo INTECO. Universidad de Valencia, 1-2 de Diciembre de 2005. Efficiency and market power in Spanish banking Comments on ‘Efficiency and market power in Spanish banking’, by R. Färe, S. Grosskopf and E. Tortosa-Ausina. Main results:  Results show a wide casuistry.  Nonetheless, let me highlight that:  Considering both revenue and cost inefficiencies adds a noteworthy value to the paper.  Simultaneous existence of low (allocative) efficiency and high profitability suggests the existence of market power in the Spanish banking industry.

4. II Jornadas de Integración Económica. Grupo INTECO. Universidad de Valencia, 1-2 de Diciembre de 2005. Efficiency and market power in Spanish banking Comments on ‘Efficiency and market power in Spanish banking’, by R. Färe, S. Grosskopf and E. Tortosa-Ausina. General comments:  High quality manuscript.  The paper embodies both highly sophisticated methodology and sound empirical results.  Beyond their academic interest, findings might provide policy-makers with meaningful information.

5. II Jornadas de Integración Económica. Grupo INTECO. Universidad de Valencia, 1-2 de Diciembre de 2005. Efficiency and market power in Spanish banking Comments on ‘Efficiency and market power in Spanish banking’, by R. Färe, S. Grosskopf and E. Tortosa-Ausina. Concerning the first stage:  Unlike most of the existing literature, profit efficiency in banking is analysed.  DEA: a good choice!!!.  Generally speaking, empirical results make sense.  Just a thought: are all tables and figures strictly necessary????.

6. II Jornadas de Integración Económica. Grupo INTECO. Universidad de Valencia, 1-2 de Diciembre de 2005. Efficiency and market power in Spanish banking Comments on ‘Efficiency and market power in Spanish banking’, by R. Färe, S. Grosskopf and E. Tortosa-Ausina. As to the second stage:  Relationship between efficiency and profitability is analysed in a (non-conventional) way, considering that profitability can explain efficiency (‘inverse causality’).  More intuition on this issue is, perhaps, needed.  A methodological novelty is also proposed: non- parametric and spline smoothing regression.

7. II Jornadas de Integración Económica. Grupo INTECO. Universidad de Valencia, 1-2 de Diciembre de 2005. Efficiency and market power in Spanish banking Comments on ‘Efficiency and market power in Spanish banking’, by R. Färe, S. Grosskopf and E. Tortosa-Ausina. As to the second stage (one more comment):  Just a suggestion: have a look to L. Simar and P. Wilson (2006), ‘Estimation and inference in two- stage, semi-parametric models of production processes’. Journal of Econometrics, in press.

8. II Jornadas de Integración Económica. Grupo INTECO. Universidad de Valencia, 1-2 de Diciembre de 2005. Efficiency and market power in Spanish banking Comments on ‘Efficiency and market power in Spanish banking’, by R. Färe, S. Grosskopf and E. Tortosa-Ausina.  Summing up: Really good paper!!!!!! Congratulations.