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Nouvelles exigences en capital des banques de l'UEMOA, concentration bancaire et coût du crédit au Togo
[New capital requirements of WEAMU banks, banking concentration and cost of crédit in Togo]

  • Gammadigbé, Vigninou

This paper analyzes the potential effects of new capital requirements of banks in the WAEMU countries on the cost of credit in Togo. The influence on lending rates is examined through the channel of the of banking concentration. We show from generalized additive models (GAM) and generalized method of moments (GMM) in dynamic panel models that banking concentration is associated with higher lending rates. In other words, the more the banking activity is concentrated in a small number of banks, the more the cost of credit is high. Without compromising the expected benefits of the new minimum capital requirements, the results support the hypothesis that they can cost to the economies of the union by strengthening the oligopolistic nature of the banking market and by increasing the cost of credit which is harmful to the economic growth. It is therefore necessary to support the new capital requirements with measures that can increase competition between banks and and promote the entry of new banks in the market.

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File URL: http://mpra.ub.uni-muenchen.de/44685/1/MPRA_paper_44685.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 44633.

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Date of creation: 27 Feb 2013
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Handle: RePEc:pra:mprapa:44633
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  1. Sharpe, Steven A, 1990. " Asymmetric Information, Bank Lending, and Implicit Contracts: A Stylized Model of Customer Relationships," Journal of Finance, American Finance Association, vol. 45(4), pages 1069-87, September.
  2. Diana Bonfim & Qinglei Dai & Francesco Franco, 2009. "The Number of Bank Relationships, Borrowing Costs and Bank Competition," Working Papers w200912, Banco de Portugal, Economics and Research Department.
  3. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  4. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
  5. Adolfo Barajas & Roberto Steiner & Natalia Salazar, 1999. "Interest Spreads in Banking in Colombia, 1974-96," IMF Staff Papers, Palgrave Macmillan, vol. 46(2), pages 4.
  6. Bourke, Philip, 1989. "Concentration and other determinants of bank profitability in Europe, North America and Australia," Journal of Banking & Finance, Elsevier, vol. 13(1), pages 65-79, March.
  7. Rajan, Raghuram G, 1992. " Insiders and Outsiders: The Choice between Informed and Arm's-Length Debt," Journal of Finance, American Finance Association, vol. 47(4), pages 1367-400, September.
  8. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  9. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
  10. Molyneux, Philip & Thornton, John, 1992. "Determinants of European bank profitability: A note," Journal of Banking & Finance, Elsevier, vol. 16(6), pages 1173-1178, December.
  11. Berger, Allen N & Udell, Gregory F, 1995. "Relationship Lending and Lines of Credit in Small Firm Finance," The Journal of Business, University of Chicago Press, vol. 68(3), pages 351-81, July.
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