The constitutional conception of market integration within the European Union entails creating a level playing field for competition in the consolidated banking sector. The financial crisis of 2008 brought with it the need to proceed with care as it rolled back the gains of improving competitive conditions in the financial sector. Even though a lot of studies have investigated competitive conditions prior to the crisis, the same cannot be said of periods after the crisis. Using both structural and non-structural measures of competitive conditions, this study found that the consolidated banking sector in Europe shows signs of a monopolistic competitive market structure based on its revenue and cost measures. As five countries – United Kingdom, France, Germany, Spain, Italy – control about 70 per cent of total assets in the consolidated banking sector. The capital expense to fixed assets and total assets in the Europe area were found to be negatively related to measures of profitability in the sector. They were indicating that the accumulation of assets eats into the incomes of banks in the sub-region, whereas bank exposures may be affecting bank profits.

Attempts by economists to identify exchange rate crisis have led to the development of the exchange market pressure (EMP) index, which has been modified to include the interest rate variable, to better capture pressure on domestic currencies. The index in this state (current) is more appropriate for countries who operate an inflation targeting (IT) monetary policy framework or a policy framework close to it. This observation among others makes the EMP index sensitive to some assumptions if sub-Saharan African countries (SSA) are involved. SSA countries employ different monetary policy frameworks making the usage of the EMP index across board misleading. Using different variations of the model specified by authors specialised in the subject, this study identified an EMP index which will be effective in identifying currency crisis in 32 sub-Saharan African (SSA) countries for which data is available. Using a ridge regression model and a dynamic OLS model as a control, the study showed that the original EMP index was good in explaining changes in the exchange rate variable in SSA if the changes in reserves are adjusted for by broad money. The explanatory power is further enhanced if the components are normalised by their standard deviations without adjusting for the money variable. It was discovered that the current version of the index which includes the interest rate variable is not good at explaining changes in the exchange rate variable in SSA even though it had some explanatory effect. Using a discrete threshold regression model this study resolves two major problem associated with the use of the exchange market pressure index in identifying exchange rate crisis. The results point to un-even implementation of the Inflation Targeting framework in the study countries.Dwelling on the assumption that a country will be able to wade of speculative attack on its currency if it has reserves that can cater for previous year's imports or short-term external debt or broad money, this study proposes two variations to the original index by Girton and Ropper (1975). Using a Generalised Method of Moments (GMM) regression model and a ridge regression model, this study found the index with the reserve variable adjusted for by imports to have the most explanatory effect on the exchange rate variable in SSA. This study recommends a combination of these indexes since the phase of economic development is not static.In testing the EMP indexes on the banking crisis in Ghana, the retail prices of premium gasoline in Ghana and Kenya and also testing the impact of the exchange rate variable in the debt sustainability of Ghana and Kenya. This study found that the exchange rate vii played a significant role in the banking sector and fluctuations in the retail price of premium gasoline in Ghana in the long run. It was also found to be putting increasing pressure on the gross debt of both Ghana and Kenya. The study recommends the creating of domestic buffers leading to the accumulation of the needed reserves to smoothen volatilities in the ...

A wide range of policy-related variables have a persistent influence on economic growth. This has consistently maintained the interest of economists on the determinants of economic growth over the years. There is consensus however that for countries to grow sustainably, a lot of stall must be placed on higher savings rate as this makes it easy for such countries to grow faster because they endogenously allocate more resources to inventive activities. Due to data difficulties in Sub-Saharan Africa (SSA) it is nearly impossible for one to consider important variables such as accumulation of knowledge and human capital when analysing growth sustainability. Studying four lower middle-income countries in SSA – Ghana, Republic of Congo, Kenya and Lesotho – this study tests the hypothesis of sustainable growth by using a Dynamic Ordinary Least Square (DOLS) model to examine the relationship between savings, investment, budget deficit and the growth variable. The results showed that savings had a significant but negative relationship with the GDP per capita (PPP). A Granger Causality test conducted showed that savings does not granger cause GDP per capita (PPP), the HDI index, deficit and investment. This leads to the conclusion that growth in these countries are not sustainable. The study recommends that policy makers focus on the savings variable if these countries will want to achieve sustainable growth.

The exchange market pressure index has proven to be a major indicator in identifying exchange rate crises in economies; however, due to the complexities surrounding developing economies, the efficacy of the index has been called to question. Specifically, the selection of an appropriate index and the problem of selecting the appropriate threshold for identifying exchange market pressure. To investigate this issue, this study identifies exchange rate crisis episodes in South Africa and Ghana using ridge regression, a discrete threshold regression, and Dynamic Ordinary Least Square (DOLS) models. The results are robust in resolving the problems with an exchange market pressure index. They also point to uneven implementation of the inflation targeting policy framework in the studied countries.

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