Financial openness, disclosure and bank risk-taking in MENA countries
AbstractIn this paper, we analyze the risk-taking behavior of banks in emerging economies in a context of international capital mobility. Our paper highlights a new channel through which depositors can exercise pressure to control risk taking. Depositors can reallocate their savings away from their home country to the more protective system of a developed economy. We recover a classical result according to which increased competition resulting from more international financial openness induces banks to take excessive risks. We find however that sufficiently high financial openness is necessary for a positive link between financial transparency and safe risk management. Finally, we test the relationship between disclosure, financial openness and bank risk-taking for a panel of 258 banks from the MENA region and Turkey.
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Bibliographic InfoPaper provided by Center for Research in Economic Analysis, University of Luxembourg in its series CREA Discussion Paper Series with number 11-11.
Date of creation: 2011
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More information through EDIRC
banking competition; disclosure; bank risk-taking; MENA banking sectors; mock compliance;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- F39 - International Economics - - International Finance - - - Other
- L80 - Industrial Organization - - Industry Studies: Services - - - General
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- Anzoategui Diego & Martinez Peria Maria S. & Rocha Roberto R, 2010.
"Bank Competition in the Middle East and Northern Africa Region,"
Review of Middle East Economics and Finance,
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- Anzoategui, Diego & Soledad Martinez Peria, Maria & Rocha,Roberto, 2010. "Bank competition in the Middle East and northern Africa region," Policy Research Working Paper Series 5363, The World Bank.
- Angkinand, Apanard & Wihlborg, Clas, 2010. "Deposit insurance coverage, ownership, and banks' risk-taking in emerging markets," Journal of International Money and Finance, Elsevier, vol. 29(2), pages 252-274, March.
- Almounsor Abdullah, 2008. "Capital Flight Accounting and Welfare Implications in the MENA Region," Review of Middle East Economics and Finance, De Gruyter, vol. 4(2), pages 1-67, April.
- T. G. Arun & J. D. Turner, 2004.
"Corporate Governance of Banks in Developing Economies: concepts and issues,"
Corporate Governance: An International Review,
Wiley Blackwell, vol. 12(3), pages 371-377, 07.
- Arun, Thankom G. & Turner, John David, 2003. "Corporate Governance of Banks in Developing Economies: Concepts and Issues," Development Economics and Public Policy Working Papers 30551, University of Manchester, Institute for Development Policy and Management (IDPM).
- Admati, Anat R & Pfleiderer, Paul, 2000. "Forcing Firms to Talk: Financial Disclosure Regulation and Externalities," Review of Financial Studies, Society for Financial Studies, vol. 13(3), pages 479-519.
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