Banking Risk in Selected MENA Countries

In terms of both developed and developing countries, banking regulations have a very important place for regulatory authorities and investors. The study aims to examine the effects of regulations on banking performance and profitability. The effects of regulatory indicators such as capital adequacy, liquidity, and total provisions on the return on assets of banks are examined. In this study, Annual data set of 53 banks operating in selected Balkan countries and Turkey was constructed for the study, and analysis estimation using the System Generalized Moments Method (SGMM) were carried out. In addition, GDP, Inflation, Total Assets, and Budget deficits are used as control variables. According to the findings obtained from the study, it has been ascertained that the primary determinant impacting the return on assets is capital adequacy as per the regulatory criterion. Apart from this, it has been concluded that liquidity, which is one of the other regulatory indicators, has a positive and a negative effect on its counterparts in terms of its effects on return on assets. According to the research analysis applied in the study, it has been concluded that the regulatory indicators increase the profitability of capital adequacy and liquidity.

Section: Financial Regulation and Banking Regulationsmentioning

confidence: 99%

The effects of banking regulations on banking performance in selected emerging countries

Buyukoglu,

Eksi,

Alihodzic

et al. 2023

“…Without considering macroeconomic factors as determinants of this risk, some other studies have focused more on bank characteristics to measure the impact of specific factors on liquidity risk. Abbas and Mourouj (2015); Ajibike and Aremu (2015); Alshatti (2015); Gadou (2022); Marozva (2015); Saleh and Abu Afifa (2020); Zaghdoudi and Hakimi (2017) have found that liquidity risk increases the financial performance of banks. Most studies focus on a single location and use return on assets, return on equity, return on capital employed and net interest margin as variables to represent bank financial performance.…”

Section: Literature Reviewmentioning

confidence: 99%

The Relationship between Liquidity Risk Management and Commercial Bank Performance: Evidence from the Western Balkans

Kalimashi

Ahmeti

Aliu

2022

The current study examines the relationship between liquidity risk management and the performance of commercial banks in the Western Balkans between 2015 to 2020. This relationship is examined by using secondary data from the financial statements. Financial performance is measured by return on assets, equity and net interest margin. Liquidity risk is represented by the quick ratio, current ratio, loan-to-deposits ratio, loan-to-assets ratio, cash and investment-to-deposit ratio, capital adequacy and interest coverage ratio. The Ordinary Least Squares model was used to process the data. The study's findings show that return on assets has a negative relationship with the current ratio but a positive relationship with loans-to-total deposits, cash plus investments-to-total deposits and capital adequacy ratio. Return on equity has a negative relationship with the quick ratio and interest coverage ratio but a positive relationship with the current ratio, loans-to-total assets and cash plus investments-to-deposits ratio. Net interest margin is negatively related to loans-to-total deposits, capital adequacy interest coverage ratio and positively related to loans-to-total assets. These findings have implications for Western Balkan banks’ variables use to manage liquidity risk. The findings of the study are significant as they can be use to enhance liquidity risk management by influencing performance indicators for Western Balkans bank.

“…A Central Bank Digital Currency involves two possible designs: (a) an account-based Central Bank Digital Currency and (b) a token-based (or value-based) Central Bank Digital Currency. These designs correspond to the two existing types of central bank money and their corresponding payment systems (Gadou, 2022;Kahn & Roberds, 2009) central bank reserves (in an account-based system) and banknotes (in a token-based system). A payment is made if a monetary asset is transferred from a payer to a payee.…”

Section: Benefits Of Implementing a Central Bank Digital Currency In ...mentioning

confidence: 99%

Restrictions on the Emission of a Digital Currency in a Central Reserve Bank for Minor Transactions

Solis¹,

Zamudio²,

Huamani³

et al. 2022

The objective of this study was to identify the challenges that the Central Reserve Bank of Peru has faced with the issuance of a digital currency that can be used as a substitute for cash in retail transactions. The study was carried out by using the hypothetical-deductive method with a basic descriptive approach rather than an experimental one. To estimate the probability of creating the Digital Currency of the Central Bank and the economic variables that explain its challenges and cross-sectional information obtained from the 2020 National Household Survey with the discrete choice model (Logit). According to the research results, i) the possibility of using a digital currency increases by 46.83% if you have a formal job compared to an informal job. ii) If the individual has an internet connection, the probability of using digital currency is 8.54%. iii) If he lives in a rural area, the probability of using digital currency is 1.79. iv) The educational level influences the probability of the use of digital currency by 1.47% if they have secondary education 16.34% have no higher education and 26.44% having university education. v) Individual’s age is important for the use of a digital currency. Older people are less likely to adapt to technology than people between the age of 18 and 24 with 8.74% use of digital currency. vi) People considered poor will have a probability of reduction of 2.26% by the use of digital currency. These findings allow the researcher to conclude that public policies should be undertaken to increase financial inclusion, close connectivity gaps and create alliances with private investment to enhance people's digital skills and the adoption of digital means of payment.