Coping with a Small Financial System

Bossone, Biagio; Honohan, Patrick

doi:10.1300/j156v04n02_02

Cited by 14 publications

(15 citation statements)

References 2 publications

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“…These intermediation costs, however, contain an important fixed cost element, at the client, bank and even financial system level. Consistent with this, previous authors have found a negative relationship between the size of banks and financial systems and operating costs and interest spreads and margins (Bossone et al, 2002). The inability of creditors to diversify risks in a competitive market due to market failures or non-existing markets results in a risk premium in the lending interest rate, increasing the lending interest rate beyond the level necessary to cover the creditor's marginal cost of funds plus the intermediation costs discussed above.…”

Section: Introductionsupporting

confidence: 58%

Bank Efficiency, Ownership, And Market Structure : Why Are Interest Spreads So High In Uganda ?

Beck¹,

Hesse²

2006

Policy Research Working Papers

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Using a unique bank-level dataset on the Ugandan banking system over the period 1999 to 2005, we explore the factors behind consistently high interest rate spreads and margins. While foreign banks charge lower interest rate spreads, we do not find a robust and economically significant relationship between privatization, foreign bank entry, market structure and banking efficiency. Similarly, macroeconomic variables can explain little of the over-time variation in bank spreads. Bank-level characteristics, on the other hand, such as bank size, operating costs, and composition of loan portfolio, explain a large proportion of cross-bank, cross-time variation in spreads and margins. However, time-invariant bank-level fixed effects explain the largest part of bankvariation in spreads and margins. Further, we find tentative evidence that banks targeting the low-end of the market incur higher costs and therefore higher margins. JEL Classifications: G21, G30, O16

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Section: Introductionsupporting

confidence: 58%

Bank Efficiency, Ownership, And Market Structure : Why Are Interest Spreads So High In Uganda ?

Beck¹,

Hesse²

2006

Policy Research Working Papers

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“…Reforms are drivers of financial market convergence, hence African stock market reforms will favor convergence and the ease of doing business (Bossone & Honohan, 2003;Clark, 2003;Ngugi et al, 2003;Mutenheri & Green, 2003). Bossone & Honohan (2003) have recommended reforms toward more regional cooperation as a possible way of alleviating issues resulting from small financial systems.…”

Section: Financial Market Convergence and African Businessmentioning

confidence: 99%

“…Bossone & Honohan (2003) have recommended reforms toward more regional cooperation as a possible way of alleviating issues resulting from small financial systems. Concerns over standardized rules and regulations in reforms for stock markets have also been raised (Clark, 2003).…”

Section: Financial Market Convergence and African Businessmentioning

confidence: 99%

African Stock Market Performance Dynamics: A Multidimensional Convergence Assessment

Asongu

2012

SSRN Journal

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“…Some studies have recommended regional cooperation as a possible way of alleviating the problem resulting from small financial systems (Bossone & Honohan, 2003). The absence of standardized rules and regulations (Clark,2003) Among the suggested strategies and implications are: looking outside the traditional inflows of FDI to Africa, establishing carefully monitored export processing zones, expanding regional trading arrangements, working together to change the negative perception of the region and reducing corruption.…”

Section: Institutions Finance and African Businessmentioning

confidence: 99%

Government Quality Determinants of Stock Market Performance in African Countries

Asongu

2011

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractHow do government policies and institutions affect stock market performance? As stock markets grow broader and deeper in African countries, the question becomes more critical.Government quality dynamics of corruption-control, government-effectiveness, political-stability or no violence, voice & accountability, regulation quality and rule of law are instrumented with income-levels, religious-dominations, press-freedom degrees and legal-origins to account for stock market performance dynamics of capitalization, value traded, turnover and number of listed companies. The results demonstrate a significant positive association between stock market performance measures and the quality of government institutions. These findings suggest countries with better developed government institutions would favor stock markets with higher market capitalization, better turnover ratios, higher value in shares traded and greater number of listed companies.

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Coping with a Small Financial System

Cited by 14 publications

References 2 publications

Bank Efficiency, Ownership, And Market Structure : Why Are Interest Spreads So High In Uganda ?

Bank Efficiency, Ownership, And Market Structure : Why Are Interest Spreads So High In Uganda ?

African Stock Market Performance Dynamics: A Multidimensional Convergence Assessment

Government Quality Determinants of Stock Market Performance in African Countries

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