Bank risk and performance in the MENA region: The importance of capital requirements

By Mohammad Bitar, Wadad Saad, M. Benlemlih. 2016

143 citations recorded by the source corpus.

This paper benefits from various risk- and non-risk-based regulatory capital ratios and examines their impact on bank risk and performance in the Middle East and North Africa (MENA) region. Our findings suggest that compliance with Basel capital requirements enhances bank protection against risk, and improves efficiency and profitability. The impact of capital requirements on bank performance is more pronounced for too-big-to-fail banks, banks in periods of crises and banks in countries with good governance. The results are also robust when controlling for the Arab Spring transition period. Finally, endogeneity checks, alternative risk and performance measures, a principal component analysis and other estimation techniques confirm findings.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/6e0565fa56404d51c79db5a10d5855b3fa37debf

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Citations in the corpus

Bank ownership, regulation and efficiency: Perspectives from the Middle East and North Africa (MENA) Region (2017, unknown): “2 The region is strategically placed between Asia, Africa and Europe with a number of significant trading canals such as the Suez, Hormuz, Bab-el-Mandeb and BiSuez, Hormuz, Bab- 2 The stock markets in North Africa tend to be very small and less developed. el-Mandeb and Gibraltar (Bitar et al. 2016).”
The effect of credit risk, liquidity risk and bank capital on bank profitability: Evidence from an emerging market (2020, methodology): “At the same time, other studies, such as Boyd and Runkle (1993), concluded there is a negative relationship between bank capital and performance.”
Sharia supervisory boards, governance structures and operational risk disclosures: Evidence from Islamic banks in MENA countries (2020, methodology): “…Dalwai et al., 2015; Elamer, 2017; Shehata, 2015), as well as adopting, implementing and enforcing the requirements of IFRS and Basel II and III accords (Al-Hadi et al., 2016; Bitar et al., 2016; Dalwai et al., 2015; Elamer et al., 2017; Haque & Brown, 2017) compared to their non-GCC counterparts.”
The impact of multi-layer governance on bank risk disclosure in emerging markets: the case of Middle East and North Africa (2019, background): “This dependence on external resources makes banks exposed to both changes in the resources flow and country-level institutional pressures (Bonetti et al., 2016; Rattanataipop, 2013).”