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Understanding the Performance of the Banking System in Times of Crisis: the Case of Commercial Banks in the CEMAC

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  • William Geslin Ondaye

Abstract

This article aims to explain the performance of the banking system in the Central African Economic and Monetary Community (CEMAC) during a crisis period by exploring the average value of the bank profitability indicator. A comparative reading of this indicator between 1986 and 2020 shows that profitability during a crisis period is higher than during the normal period. Using an analysis of the model of banking performance with the method of generalized moments (GMM), the results show that the contradiction relating to the banking performance is explained by- 1)- the strong presence of the State in the capital of commercial banks in the CMEAC zone during the crisis; 2)- the decline in liquidity characteristic of crisis periods also explains this performance of the CEMAC banking sector. It is recommended that the monetary authorities ensure that their decisions are strictly applied by commercial banks in normal times as well as in times of crisis

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  • William Geslin Ondaye, 2022. "Understanding the Performance of the Banking System in Times of Crisis: the Case of Commercial Banks in the CEMAC," Applied Economics and Finance, Redfame publishing, vol. 9(1), pages 96-107, December.
    • Handle: RePEc:rfa:aefjnl:v:9:y:2022:i:1:p:96-107
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    References listed on IDEAS

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    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "The Aftermath of Financial Crises," American Economic Review, American Economic Association, vol. 99(2), pages 466-472, May.
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    6. Ms. Enrica Detragiache & Mr. Thierry Tressel & Ms. Rima A Turk, 2018. "Where Have All the Profits Gone? European Bank Profitability Over the Financial Cycle," IMF Working Papers 2018/099, International Monetary Fund.
    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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