37 research outputs found
Is the MENA banking sector competitive?
The purpose of this paper is to investigate the competitive conditions and revenue drivers of commercial banks in the MENA region in the context of Panzar–Rosse model. It is the first study of its kind that examines a large sample of MENA banks for an extensive period (1999–2012) during an era of political and economic unrest and transformation that includes the the global financial crisis (2007–2009). Panel data analysis using fixed effects was employed in order to examine whether the competitive conditions in MENA banks is explained by monopoly, monopolistic competition or perfect competition. Findings show that MENA banks operate under monopolistic competition, and bank-specific variables show a positive impact on revenue. These findings indicate that policymakers should relax capital adequacy requirements to guarantee the stability of the financial system. They also raise a concern that commercial banks in the MENA economies tend to concentrate on traditional lending activities, where their competitive position may be eroded in the long run by the decreasing state role of Islamic banks and by mergers that are not empirically justified for MENA banks during this period
Empirical evidence on bank market power, business models, stability and performance in the emerging economies
Pricing Beliefs: Empirical Evidence from the Implied Cost of Deposit Insurance for Islamic Banks
The Impact of Capital on Lending in Economic Downturns and Investor Protection The Case of Large EU Banks
This paper attempts to find out whether better quality of investor protection matters for the effect of capital
ratio on loan growth of large EU banks in 1996-2011. We focus on several measures of the quality of
investor protection with a proven track record in the banking literature, i.e.: anti-self-dealing index, ex-antecontrol
and ex-post-control of anti-self-dealing indices, and creditor protection rights index. Our results show
that better investor protection increases the procyclical impact of capital on lending in the sample of banks
reporting unconsolidated data. This is consistent with the view that better shareholders rights protection
induces bank borrowers to take more loans and to engage in more risk-taking, in particular during economic
booms, which results in greater sensitivity of bank lending to capital ratios in economic downturns. The
opposite effect is found in the sample of banks reporting consolidated data. This effect is consistent with the
view that better minority shareholders protection may reduce risk-taking incentives of large banks and result
in better risk management of credit portfolio (and other investments of such banks)