Did Financial Liberalization Lead to Bank Fragility? Evidence from Tunisia

Helmi Hamdi, Abdelaziz Hakimi and Mouldi Djelassi

The International Journal of Business and Finance Research, 2013, vol. 7, issue 5, 77-88

Abstract: The aim of this study is to investigate the performance of the Tunisian banking sector following the liberalization of its financial sector. To this end, we collected annual frequency data from nine banks for the period 1980-2009. By using Seemingly Unrelated Regression (SUR), our estimations show that financial liberalization negatively affected the profitability of Tunisian banks and increased the degree of credit risk. However, empirical results reveal that financial liberalization significantly increased the liquidity of banks due to liberalization of deposit interest rates.

Keywords: Financial Liberalization; Bank Frugality; Tunisian Banks; SUR Regression (search for similar items in EconPapers)
JEL-codes: E44 G21 L51 N24 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Working Paper: Did financial liberalization lead to bank fragility? Evidence from Tunisia (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:7:y:2013:i:5:p:77-88

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