The interplay of competition, regulation and stability: the case of Sub-Saharan African commercial banks
Open Access
- 13 February 2019
- journal article
- Published by LLC CPC Business Perspectives in Banks and Bank Systems
- Vol. 14 (1), 65-80
- https://doi.org/10.21511/bbs.14(1).2019.07
Abstract
Stimulating competition in the bank system without compromising the stability constitutes a major puzzle that bank regulators and practitioners face. Hitherto, empirical studies focusing on Sub-Saharan Africa in addressing these issues for the anticipated regional integration and sustainable growth are rare. This study applied structural equation modelling to simultaneously analyze competition, regulation and stability in a panel of 440 Sub-Saharan African commercial banks over the period from 2006 to 2015. The results provided evidence that competition affects stability via efficiency and that regulation affects stability via competition and efficiency. This study produced critical theoretical and methodological insights with substantial implications for the conduct of bank regulatory policy.Keywords
This publication has 50 references indexed in Scilit:
- Bank competition and stability: Cross-country heterogeneityJournal of Financial Intermediation, 2013
- Capital regulation, bank competition, and financial stabilityEconomics Letters, 2011
- Market Power and the Lerner Index: A Classroom ExperimentJournal of Industrial Organization Education, 2011
- Lending Booms and Lending StandardsThe Journal of Finance, 2006
- The institutional memory hypothesis and the procyclicality of bank lending behaviorJournal of Financial Intermediation, 2004
- Bank regulation and supervision: what works best?Journal of Financial Intermediation, 2004
- Capital requirements, market power, and risk-taking in bankingJournal of Financial Intermediation, 2004
- Competition and Financial StabilityJournal of Money, Credit and Banking, 2004
- Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternativesStructural Equation Modeling: A Multidisciplinary Journal, 1999
- A model for technical inefficiency effects in a stochastic frontier production function for panel dataEmpirical Economics, 1995