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Purpose This paper aims to examine the interaction effect of regulations (monetary and macro-prudential) in explaining the possible non-linear effect of bank risk exposures (credit risk and insolvency risk) on banking stability in Africa. Design/methodology/approach The study uses a two-step system generalized method of moments (GMM) estimator for a data set of banks across 54 African countries over the period 2006–2020. Findings The authors find that the relationships between bank credit risk–bank stability and bank insolvency risk–bank stability are non-linear and characterized by the presence of optimal thresholds, which are 5.3456 for credit risk and 2.3643 for insolvency. Contrary to their positive effects below these optimal thresholds, credit risk and insolvency risk become negatively linked to bank stability in Africa. The authors find that macro-prudential action and monetary policy both have a positive and significant relationship with bank stability. The authors provide evidence to support that the marginal effect of excessive credit risk and insolvency risk on bank stability is reduced when interacted with monetary and macro-prudential regulations, and the impact is significant in strong institutional environment. Research limitations/implications Future research should extend data to include developing and emerging economies in the world. Also, policymakers, researchers and practitioners should consider different regulatory and institutional frameworks in explaining the relationship between the thresholds of bank risk exposures and bank stability in the world. Practical implications Regulatory authorities should have to deeply reform their financial systems, develop risk-based regulatory framework and effective supervision mechanism relating to appropriate techniques that maintain an optimal and desired level of bank risks and risk-taking behaviours required to ensure a stable banking system. Originality/value To the best of the authors’ knowledge, this is the first study to examine how different regulatory frameworks shape the non-linear impact of bank risk exposures on bank stability in Africa.

Several studies have revealed that many factors affect economic growth. Remittances and government stability have been identified as two of these factors. Over the years, remittances have become a major source of financial inflows, especially in Ghana. This study examines the role of government stability in the remittance-economic growth relationship in Ghana. Annual time series data from 1984 to 2020 was extracted from the World Development Indicators (WDI) and the International Country Risk Guide (ICRG). An ARDL model with a level structural break was estimated. The results show, first, that a cointegration relationship exists among the variables in the presence of structural breaks. Secondly, remittances and government stability have a significant, positive long-run impact on economic growth, while no significant impact of GDPPC and government stability on remittances was found. Thirdly, in the short run, remittances and government stability are not significantly associated with growth. The role of remittances in the economic growth of Ghana is important. When remittances increase, economic growth will likewise increase. Government policy-making should create an enabling environment to channel remittances into productive uses, including entrepreneurial ventures. Remittances must be received through proper channels for easy accountability, and government stability should be complemented by good governance to further foster economic growth.