IDEAS home Printed from https://ideas.repec.org/a/wsi/rpbfmp/v28y2025i02ns0219091525500110.html
   My bibliography  Save this article

The Impact of Ownership Concentration on the Relationship between Financial Risks and Financial Stability

Author

Listed:
  • Ahmed Sayed Rashed

    (School of Economics and Management, Beihang University, Beijing, China2Faculty of Commerce, Cairo, Egypt)

  • Dexiang Wu

    (School of Economics and Management, Beihang University, Beijing, China)

Abstract

This paper empirically investigates the impact of ownership concentration on the relationship between financial risks and financial stability across a sample of 110 conventional banks in the Middle East and North Africa (MENA) region, comprising 1,650 bank-year observations from 2007 to 2021 using various statistical methods. The findings reveal that there is no simultaneous link between credit risk and liquidity risk when applying 2SLS, suggesting these risks can be jointly managed to enhance banking stability. The analysis further indicates that state-owned banks are more stable, less likely to engage in excessive risk-taking, and more aligned with social welfare objectives. These banks effectively neutralize the adverse effects of financial risks on stability. Additionally, foreign banks demonstrate a stabilizing influence, attributed to their access to advanced technologies, global market integration, and enhanced risk diversification. Their operational transparency and information efficiency help mitigate the negative impacts of credit and liquidity risks. The results underscore the importance of ownership structure in promoting financial resilience. They support the principles of Basel III, particularly the emphasis on managing liquidity and credit risk in tandem. Ultimately, this paper highlights how effective governance through ownership concentration contributes to financial safety, economic growth, and employment generation in the MENA region.

Suggested Citation

  • Ahmed Sayed Rashed & Dexiang Wu, 2025. "The Impact of Ownership Concentration on the Relationship between Financial Risks and Financial Stability," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 28(02), pages 1-46, June.
    • Handle: RePEc:wsi:rpbfmp:v:28:y:2025:i:02:n:s0219091525500110
    DOI: 10.1142/S0219091525500110
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0219091525500110
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0219091525500110?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:rpbfmp:v:28:y:2025:i:02:n:s0219091525500110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/rpbfmp/rpbfmp.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.