Banking competition and stability: evidence from West Africa

Cobbinah, Joana; Zhongming, Tan; Ntarmah, Albert Henry

doi:10.3934/nar.2020015

Cited by 8 publications

(6 citation statements)

References 52 publications

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“…The determinant of VFAs risk is a topic that has received much attention in financial stability (Cobbinah, Zhongming and Ntarmah, 2020). One common feature of related literature is that it has assumed that the determinants are homogeneous.…”

Section: Namelymentioning

confidence: 99%

Re-examining Bitcoin Volatility: A CAViaR-based Approach

Dong

Floros

et al. 2021

Emerging Markets Finance and Trade

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The paper aims to explore the heterogeneous feature in the determination of Bitcoin volatility using a Markov regime-switching model and test its forecasting ability. The forecasting methodology of the risk measurement of Bitcoin's returns is based on the Conditional Autoregressive Value at Risk models (CAViaR) approach. Our results show that Bitcoin's volatility is significantly related to the volatility of the crypto-asset's return and the main determinants of volatility are speculation, investor attention, market interoperability and the interaction between speculation and market interoperability. In addition, we present evidence that investors' attention is the main source of volatility. Speculation and the interaction term are related in a "U-shaped" form, whereas investor attention and market interoperability show a linear trend on the volatility of Bitcoin.

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Section: Namelymentioning

confidence: 99%

Re-examining Bitcoin Volatility: A CAViaR-based Approach

Dong

Floros

et al. 2021

Emerging Markets Finance and Trade

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“…With this, banks can offer products and services at low prices and this could eliminate any problems associated with NPLs. This is because once the prices of bank products and services are low, the customers will be able to afford the repayment of borrowed funds (Azmi et al, 2019; Canoy et al, 2001; Carletti & Hartmann, 2003; Cobbinah et al, 2020; De‐Ramon et al, 2019; Fu et al, 2014; Kasman et al, 2020; Liu et al, 2013; Vives, 2010). On the other hand, the competition–fragility theory explains that with a low level of market power, banks are unable to charge prices that will make them profitable to sustain their stability.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial inclusion, economic freedom and financial stability in sub‐Saharan Africa

Frimpong

Yusuf

Boateng

et al. 2023

Thunderbird Intl Bus Rev

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Executive Summary The study examines the role of economic freedom in the relationship between financial inclusion and stability in sub‐Saharan African economies. By employing the System General Method of Moment and data from 39 sub‐Saharan African countries between 2004 and 2017, the study examines whether economic freedom (i.e., financial and business freedom) conditions the effect of financial inclusion on stability. Results from the study show evidence of a positive impact of financial inclusion on financial stability in sub‐Saharan African economies. Again, the results depict that financial inclusion could better enhance financial stability in economies with a high level of economic freedom (i.e., financial and business freedom). The results suggest that policymakers should allow financial institutions to operate with the level of freedom required to provide services at the lowest possible price. Further, it is recommended that policymakers should ensure that administrative requirements are minimal, bureaucracy costs are lesser, and licensing regulations for startups and expansion of existing firms are friendly. With this, associated increases in business and financial freedom would have promising implications for the relationship between financial inclusion and stability. Managerial Implications of the Study This research is very vital for firms in both the financial and nonfinancial. Specifically, managers of firms in the financial sector can embrace the level of financial freedom that would be allowed by the government, to come up with new and inclusive financial products, while putting in measures not to endanger the stability of the financial sector. Managers in the business sector could also take advantage of the business freedom that would be allowed by the government to diversify business operations, increase profitability and avoid causing nonperforming loan problems to banks. Originality/Value The study provides the first insight into how economic institutions condition the effect of financial inclusion on financial stability, which has not been previously studied.

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Section: Literature Reviewmentioning

confidence: 99%

“…Claessens (2009), asserted that a competitive banking system will lead to an improved superior banking operations with highly qualitative and innovative financial products and services. Berger (1995) and Cobbinah et al (2020), also posited that the competiveness of any banking system could be driven by the nature of banking supervision, governance and regulatory regimes. Both the views of the 'efficient structure' hypothesis, the 'quiet-life' hypothesis or the 'structure-conduct-performance' paradigm suggest that the choices of banking reforms that improves both the bank-specific or banking industry-specific factors may either have a positive or negative impact on bank efficiency as well.…”

Section: Literature Reviewmentioning

confidence: 99%