Oil Prices and Bank Profitability: Evidence from Major Oil-Exporting Countries in the Middle East and North Africa
AbstractThis paper analyzes the relationship between oil price shocks and bank profitability. Using data on 145 banks in 11 oil-exporting MENA countries for 1994-2008, we test hypotheses of direct and indirect effects of oil price shocks on bank profitability. Our results indicate that oil price shocks have indirect effect on bank profitability, channeled through country-specific macroeconomic and institutional variables, while the direct effect is insignificant. Investment banks appear to be the most affected ones compared to Islamic and commercial banks. Our findings highlight systemic implications of oil price shocks on bank performance and underscore their importance for macroprudential regulation purposes in MENA countries.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 09/220.
Date of creation: 01 Oct 2009
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-AFR-2009-10-31 (Africa)
- NEP-ALL-2009-10-31 (All new papers)
- NEP-ARA-2009-10-31 (MENA - Middle East & North Africa)
- NEP-BAN-2009-10-31 (Banking)
- NEP-CWA-2009-10-31 (Central & Western Asia)
- NEP-ENE-2009-10-31 (Energy Economics)
- NEP-MIC-2009-10-31 (Microeconomics)
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- Sufian, Fadzlan & Habibullah, Muzafar Shah, 2012. "Globalizations and bank performance in China," Research in International Business and Finance, Elsevier, vol. 26(2), pages 221-239.
- Barkoulas, John T. & Chakraborty, Atreya & Ouandlous, Arav, 2012. "A metric and topological analysis of determinism in the crude oil spot market," Energy Economics, Elsevier, vol. 34(2), pages 584-591.
- Mohamed El Hedi Arouri & Christophe Rault, 2010.
"Les effets des fluctuations du prix du pétrole sur les marchés boursiers dans les pays du Golfe,"
- Mohamed El Hedi Arouri & Christophe Rault, 2010. "Les effets des fluctuations du prix du pétrole sur les marchés boursiers dans les pays du Golfe," Revue économique, Presses de Sciences-Po, vol. 0(5), pages 945-959.
- Tahsin Saadi Sedik & Oral Williams, 2011. "Global and Regional Spillovers to GCC Equity Markets," IMF Working Papers 11/138, International Monetary Fund.
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