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Bad luck, Bad policy or Bad banking? Understanding the financial management behavior of MENA banks

Saibal Ghosh

Journal of Multinational Financial Management, 2018, vol. 47-48, 110-128

Abstract: The importance of management behaviour for MENA country banks has gained significant importance, especially in the wake of the financial crisis. To address this issue, we exploit bank-level data across MENA countries for an extended time period and examine the different facets of management behaviur. The analysis provides evidence in favor of bad luck hypothesis that is equally applicable to both conventional and Islamic banks. Relatedly, we also find that the moral hazard hypothesis and the gamble for resurrection hypothesis to be relevant, although the relative importance of the management behavior differs across bank ownership. Further disaggregation by country categorizations shows that this behavior varies between oil exporters and oil importers as also between countries with explicit and implicit deposit insurance.

Keywords: Banking; Management behavior; Delinquent loans; Capital; Efficiency (search for similar items in EconPapers)
JEL-codes: D21 G21 G28 P51 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1016/j.mulfin.2018.10.001

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Journal of Multinational Financial Management is currently edited by I. Mathur and G. G. Booth

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