On the Sensitivity of Banking Activity Shocks: Evidence from the CEMAC Sub-region

Christian Nguena and Tsafack Nanfosso Roger ()
Additional contact information
Tsafack Nanfosso Roger: REMA (Research in Applied Micro and Macro economics)

Economics Bulletin, 2014, vol. 34, issue 1, 354-372

Abstract: This paper qualitatively and quantitatively assesses the degree of resilience in the financial intermediary sector of the Economic and Monetary Community of Central African States (CEMAC) to macroeconomic shocks and discusses the relevant policy implications. Using GMM and a battery of estimations techniques, the panel-based investigations broadly show that the sub-region is vulnerable to macroeconomic shocks. Lower bank provisions result on the one hand from shortages or decreases in long-term financing, real exchange and GDP per capita growth rate on the other hand from increases of interest rates. Whereas the change in interest rate increases net income commission, the effect is negative from lower levels of short-term financing. The incidence of changes in interest rates on the interest rate margin of banks is ambiguous. The findings broadly confirm the need to incorporate macroeconomic shocks in financial policy decision making. The paper contributes at the same to the knowledge on stock management in monetary zones and the need to: (1) timely intervene to mitigate potential shocks and; (2) increase control to sustain the credibility of the banking system.

Keywords: Macroeconomic shock; Panel data econometrics; Shocks management; Banking economics. (search for similar items in EconPapers)
JEL-codes: E4 G0 (search for similar items in EconPapers)
Date: 2014-02-28
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (50)

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I1-P34.pdf (application/pdf)

Related works:
Working Paper: On the Sensitivity of Banking Activity Shocks: Evidence from the CEMAC Sub-region (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-13-00643

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().