Bank Regulation in the Economies in Transition

Kaliyev Kalizhan Sagatbekovich and Mira Nurmakhanova

SAGE Open, 2021, vol. 11, issue 4, 21582440211061537

Abstract: Given that banking in economies of transition fluctuate heavily, we explore the effect of regulatory norms on performance of banking industry. In particular, we examine the effect of Reserve Requirements, Activity Restrictions, and Capital Stringencies on the overall industry profitability and stability of the financial institutions. We utilize the Generalized Methods of Moments methodology to the panel data regressions over 17 different transitional economies during, and after the crisis period of 2008 through to 2019. Our results show that the Reserve Requirements regulatory norm is the only significant factor that improves the profitability and diminishes the risk of financial instability. The findings are confirmed with our tests over the regional sub-samples. This research sheds the light on the necessities of political and economic reforms in banking for these markets in transition.

Keywords: bank regulation; bank financial stability; bank performance; transition economies and crisis (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:11:y:2021:i:4:p:21582440211061537

DOI: 10.1177/21582440211061537

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