Financial institutions can be inefficient, costing them a lot of money and potential profits. This article looks at why some banks are more efficient than others. They consider different ways of measuring efficiency and various factors like bank characteristics, market conditions, and regulations. The researchers studied US banks from 1990 to 1995. They found that differences in how efficiency is defined and measured, as well as factors like bank size and market competition, can explain why some financial institutions are more efficient than others.