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Information, Institutions and Banking Sector Development in West Africa

Panicos Demetriades () and David Fielding ()

No 902, Working Papers from University of Otago, Department of Economics

Abstract: Using a new panel dataset for banks in eight West African countries, we explore the factors that exacerbate or alleviate excess liquidity, and the factors that promote or retard the rate of growth of banks' assets. Loan default rates in the region are high, and variations in the rate impact on liquidity and asset growth. However, the size of this effect is very sensitive to bank age. Some types of improvement in the quality of governance reduce excess liquidity and promote asset growth. However, the impact of other types of improvement, particularly with regard to corruption, is ambiguous. We uncover evidence that provides an explanation for this ambiguity.

Keywords: Africa; Banking; Default; Institutions; Liquidity (search for similar items in EconPapers)
JEL-codes: G21 O16 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2009-01, Revised 2009-01
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http://www.otago.ac.nz/economics/research/otago077118.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: INFORMATION, INSTITUTIONS, AND BANKING SECTOR DEVELOPMENT IN WEST AFRICA (2012) Downloads
Working Paper: Information, Institutions and Banking Sector Development in West Africa (2009) Downloads
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