Over financial regulation and stability: Does it matters for bank efficiency in Nigeria?
PDF

Keywords

Bank efficiency
Financial regulation
Stability.

How to Cite

ENEMONA, J. O. (2021). Over financial regulation and stability: Does it matters for bank efficiency in Nigeria?. Turkish Economic Review, 8(1), 1–13. https://doi.org/10.1453/ter.v8i1.2176

Abstract

Abstract. Banks play a key and critical role in society, mediating resources and assets around the economy between surpluses and household spending on deficits. Therefore, they have a great responsibility for sustainability and prosperity. This study is motivated by the need to investigate whether competition, regulation and stability are important for the efficiency of the Nigerian banking system. Data sourced from the World Development Indicators between 1996 and 2017 was used. The results show a negative and statistically significant relationship exists between financial regulation and efficiency of the banking sector. However, further results show a positive and statistically significant relationship exists between financial regulation and stability in the system. Thus, the study concludes by emphasizing the importance of stability and bank performance matters in Nigeria.

Keywords. Bank efficiency, Financial regulation, Stability.

JEL. D81, D91, E71, G01, G41, H11, I18, Z18.
https://doi.org/10.1453/ter.v8i1.2176
PDF

References

Admati, A., DeMarzo, P.H., & Pfleiderer, P. (2012). Debt overhang and capital regulation, Rock Center for Corporate Governance at Stanford University. [Retrieved from].

Arch, L. (2020). Effective bank regulation: Seven guiding principle. Journal of Financial Regulation and Compliance, 28(2), 301-314. doi. 10.1108/JFRC-06-2019-0075

Adrian, T., & Hyun, S. (2008). Financial intermediaries, financial stability and monetary Policy, FRB New York, Staff Report, No.346. [Retrieved from].

Agarwada, R. (2005). International cooperation behind national borders: Country case study of China, UN Development Programme, New York. [Retrieved from].

Agbetsiafa, D. (2011). The recent global financial crisis: Impacts on selected developing regions, International Business and Economics Research Journal, 10(10), 93-101. doi. 10.19030/iber.v10i10.9020

Ahearne, A., Joseph, G., Jane, H., & Steve, K. (2002). Preventing deflation: Lessons from Japan’s experience in the 1990s. Board of governors of the federal reserve system, International Finance Discussion Papers, No.729. [Retrieved from].

Akyuz, Y. (2009). Policy response to the global financial crisis: Key issues for developing countries, South Centre, Research Papers, No.24. [Retrieved from].

Allen, F., Babus, A., & Carletti, E. (2009). Financial crises: theory and evidence. Annual Review Financial Economics, 1(1), 97-116. doi. 10.1146/annurev.financial.050808.114321

Allen, F., Gu, X., & Qian, J. (2017). People's bank of China: History, current operations and future outlook. Current Operations and Future Outlook (October 10, 2017). [Retrieved from].

Allen, F., & Gu, X. (2018). The interplay between regulations and financial stability. Journal of Financial Services Research, 53(2), 233-248. doi. 10.1007/s10693-018-0296-7

Avgouleas, E., & Xu, D. (2017). Overhauling China's financial stability regulation: Policy riddles and regulatory dilemmas. AsianJLS, 4(1), 1-57. doi. 10.1017/als.2017.3

Barrell, R., & Davis, E.P. (2005). Policy design and macroeconomic stability in Europe, National Institute Economic Review, 191, 94–105. doi. 10.1177/0027950105052664

Barrell, R., Davis, E.P., Karim, D. & Liadze, I. (2010). Bank regulation, property prices and early warning systems for banking crises in OECD countries, Journal of Banking and Finance, 34(9), 2255–2264. doi. 10.1016/j.jbankfin.2010.02.015

Baek, S. (2017) Imperfect transparency and the risk of securitization. Florida State University.

Battisti, E., Creta, F., & Miglietta, N. (2020). Equity crowdfunding and regulation: implication for real estate sector in Italy, Journal of Financial Regulation and Compliance, 28(3), 353-368. doi. 10.1108/JFRC-08-2018-0109

Demirgüç-Kunt, A., & Martínez-Pería, M.S. (2010). A framework for analyzing competition in the banking sector: an application to the case of Jordan. World Bank Policy Research Working Paper, No.5499. [Retrieved from].

Cao, R., Horváth, L., Liu, Z., & Zhao, Y. (2020). A study of data-driven momentum and disposition effects in the Chinese stock market by functional data analysis. Review of Quantitative Finance and Accounting, 54(1), 335-358. doi. 10.1007/s11156-019-00791-x

Doan, A.-T., Lin, K.-L., & Doong, S.-C. (2018). What drives bank efficiency? The interaction of bank income diversification and ownership. International Review of Economics & Finance, 55, 203–219. doi. 10.1016/j.iref.2020.10.008

Djalilov, K., & Piesse, J. (2016). Determinants of bank profitability in transition countries: What matters most?’ Research in International Business and Finance, 38, 69–82. doi. 10.1016/j.ribaf.2016.03.015

Friedman, M., & Schwartz, A.J. (2008). A Monetary History of the United States, 1867-1960. Princeton University Press.

Fries, S., & Taci, A. (2005). Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries. Journal of Banking & Finance, 29(1), 55–81. doi. 10.1016/j.jbankfin.2004.06.016

Gorton, G. (1988). Banking panics and business cycles. Oxford Economic Papers, 40(4), 751-781. doi. 10.1093/oxfordjournals.oep.a041885

Grigorian, D.A., & Manole, V. (2006). Determinants of commercial bank performance in transition: An application of data envelopment analysis. Comparative Economic Studies, 48(3), 497–522.

Hasan, I., Horvath, R., & Mares, J. (2020). Finance and wealth inequality. Journal of International Money and Finance, 108, 102161. doi. 10.1016/j.jimonfin.2020.102161

Li, S. (2019). The impact of bank regulation and supervision on competition: Evidence from emerging economies. Emerging Market Finance and Trade, 55(10), 2334-2364. doi. 10.1080/1540496X.2018.1547191

Luo, Y., Tanna, S., & De Vita, G. (2016). Financial openness, risk and bank efficiency: Cross-country evidence. Journal of Financial Stability, 24, 132–148. doi. 10.1016/j.jfs.2016.05.003

Okahara, N. (2019). Banks’ disclosure of information and financial stability regulations. Evolutionary and Institutional Economics Review, 16(1), 91-115. doi. 10.1007/s40844-018-0121-x

Sun, L. (2020). On the people’s bank of China’s financial strength and policy outcomes. Journal of Central Banking Theory and Practice, 9(3), 135-161.

Teichmann, F.M. & Falker, M.C. (2020). Money laundering through bank in Dubai, Journal of Financial Regulation and Compliance, 28(3), 337-352. doi. 10.1108/JFRC-07-2019-0087

Creative Commons License
This article licensed under Creative Commons Attribution-NonCommercial license (4.0)

Downloads

Download data is not yet available.