Multiple large shareholders and bank stability: the case of MENA banks

Boussaada, Rim

doi:10.1108/mf-03-2020-0142

Cited by 3 publications

(2 citation statements)

References 88 publications

(96 reference statements)

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“…This reduces the level of NPLs, increases bank profitability and stability. This results in line with Boussaada (2021). As institutional quality, we found that more control of corruption significantly increases bank stability in North Africa.…”

Section: Findings Of the Pstr Regressionsupporting

confidence: 89%

Testing the Non-Linear Relationship between Liquidity Risk and Bank Stability in the MENA Region

Khemiri

2022

IJEFI

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This paper aims to investigate whether the relationship between liquidity risk and bank stability is non-linear. It uses a sample of 83 MENA banks from 2005 to 2020. Due to several economic, financial, and regulation differences, the whole sample was divided into two sub-samples. The first one is related to Middle East countries and covers 56 banks while the second one is related to North African countries and covers 27 banks. We performed the Panel Smooth Threshold Regression (PSTR) model proposed by González et al. (2005) as an empirical approach. The empirical results indicate that exists a threshold effect in the liquidity risk-bank stability relationship. More specifically, we found that below a certain threshold, the loan to-deposit-ratio does not exert any significant effect on bank stability in the Middle East; while it significantly increases the stability of banks in North African countries. Above, the same threshold, the loan-to-deposit ratio significantly decreases bank stability for the two sub-samples.

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Section: Findings Of the Pstr Regressionsupporting

confidence: 89%

Testing the Non-Linear Relationship between Liquidity Risk and Bank Stability in the MENA Region

Khemiri

2022

IJEFI

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“…However, the work of Bourkhis and Nabi (2013) found a contrary result. The result also reveals that a financial crises affect banking stability adversely; this coincides with the work of (Beck et al ., 2013a, b; Keffala, 2015; Ghenimi et al ., 2017; Boussaada, 2021). Similarly, the results reveal that high-crisis countries and crisis periods adversely affect banking stability in the region.…”

Section: The Empirical Results Findings and Discussionmentioning

confidence: 99%

Probability of default and political instability in the MENA region

Aliyu

Mohammad

Wahab

2023

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PurposeThis study aims to empirically investigate the impact of political instability on the banking stability of the dual banking system in the Middle East and North African (MENA) countries.Design/methodology/approachThe study measures banking stability with probability of default (PD) and Zscore by employing the generalised method of moment (GMM) between 2007 and 2021 on the dual banking system in the region. The authors further estimate short-long-run situations coupled with a robustness test using a generalised least square (GLS) model.FindingsThe authors' findings indicate that institutional factors of political stability, crisis period, high-crisis countries, law and order and macroeconomic indicators influence the two types of banking stability in the region. The authors found the consistency of the factors explaining stability in the region in both short-and long-run situations. Consequently, the study also reveals the adverse effects of crisis periods and high-crisis countries on banking stability.Practical implicationsThe results of this study explicitly identify the critical need for sustaining political stability and abiding by laws and order to achieve dual banking stability in the region. Therefore, policymakers may consider allowing the region's banks to operate beyond retail banking since diversification enhances banking stability.Originality/valueThe authors' study balances by employing dual stability measurement in predicting the impact of political instability, law and order and other indicators on the MENA region's two banking models. This study uncovers the effect of the global crisis period on banking stability and high-crisis countries in the region and verifies the models' robustness.

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