THE EFFECT OF BANKING COMPETITION ON FINANCIAL STABILITY IN CENTRAL AFRICAN ECONOMIC AND MONETARY COMMUNITY ZONE

Thierry Mamadou Asngar, Bruno Emmanuel Ongo Nkoa and Wirajing Kindzeka
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Thierry Mamadou Asngar: Department of Economics, University of N’Djamena, Chad.
Bruno Emmanuel Ongo Nkoa: Department Development Economics, University of Dschang, Cameroon.

Studii Financiare (Financial Studies), 2022, vol. 26, issue 1, 23-50

Abstract: The study investigates the effect of banking competition on financial stability in Central African Economic and Monetary Community. Financial stability is measured by bank Z-score and non-performing loans ratio. The Herfindahl Hirschman Index is used as a proxy of banking competition in both the loan and the deposit market. The study adopted the OLS, the Driscol/Kraay and the Newey-West Standard errors techniques. The results obtained in these techniques have provided a positive effect of banking competition on financial stability in the Central African Economic and Monetary Community zone. The findings of the study show that the banking sector in this region is more financially stable in competitive conditions than in highly concentrated conditions.

Keywords: banking industry; financial system; non-performing loans ratio; bank Z-score (search for similar items in EconPapers)
JEL-codes: D41 E44 E51 G21 G24 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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