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Assessing the determinants of banking stability in the MENA region: what role for economic and financial freedom?

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  • Nesrine Djebali

    (University of Jendouba)

Abstract

The main objective of this paper is to investigate the effects of economic freedom and financial freedom on bank stability in 12 Middle-East and North Africa region countries during the period 2005–2020. Using an empirical approach based on the System Generalized Method of Moments, our results reveal that economic freedom, financial freedom, investment freedom and business freedom increase bank stability. A high degree of economic freedom promotes innovation and entrepreneurship and, hence, leads to economic growth and better banking stability. In contrary, we confirm that monetary freedom negatively affects bank stability. The same result was confirmed for the two sub-samples of Middle Eastern countries and North African countries.

Suggested Citation

  • Nesrine Djebali, 2024. "Assessing the determinants of banking stability in the MENA region: what role for economic and financial freedom?," Journal of Banking Regulation, Palgrave Macmillan, vol. 25(2), pages 127-144, June.
    • Handle: RePEc:pal:jbkreg:v:25:y:2024:i:2:d:10.1057_s41261-023-00220-z
    DOI: 10.1057/s41261-023-00220-z
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    More about this item

    Keywords

    Economic freedom; Financial freedom; Bank stability; Middle East and North Africa;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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