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Risk-taking, Ownership and Excess Reserves in the Ghanaian Banking System

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  • Theodora Akweley Odonkor
  • Bright Addiyiah Osei
  • Bo Sjö

Abstract

This study looks at the effects of ownership structure and the risk-taking behaviour of banks in Ghana. Using data from 21 banks during 2000–2010, the study employs random effects panel data regressions. The results show that banks prefer to hold high excess reserves instead of lending to borrowers when they perceive the markets to be risky. Locally owned banks tend to be more efficient in managing their risk than foreign-owned banks, while closed corporations tend to perform better in managing risk than locally owned banks. JEL Classification: G21, G31, G28, O16

Suggested Citation

  • Theodora Akweley Odonkor & Bright Addiyiah Osei & Bo Sjö, 2016. "Risk-taking, Ownership and Excess Reserves in the Ghanaian Banking System," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 15(2), pages 147-168, August.
    • Handle: RePEc:sae:emffin:v:15:y:2016:i:2:p:147-168
    DOI: 10.1177/0972652716645890
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    More about this item

    Keywords

    Bank risk taking; ownership and excess reserves; Ghanaian banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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