Abstract
Banking efficiency has been one of the most often studied subjects since the introduction of Data Envelopment Analysis. However, there is no broadly accepted model specification yet. Recently a new model, particularly addressing the ambiguous role of deposits in banking, has been presented by Holod and Lewis (2011). The objective of this article is to evaluate the applicability of this new model. Analyzing panel data on 1172 German cooperative banks in the period 1991-2009, this article finds the special treatment of deposits to be a valuable amendment to the evaluation of banking efficiency. However, the model of Holod and Lewis (2011) requires assumptions which cannot be made for any market.
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