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Do Banks In Sub-Saharan Africa With Market Power Benefits From Monetary Policy?

Author

Listed:
  • Mohammed Amidu

    (University of Ghana Business School)

Abstract

This paper assesses the competitive environments of SSA banks with the view of analysing whether banks with market power profit from monetary policy. It employs various specifications of Lerner index as a measure of market power for 264 banks across 24 SSA countries. Tightening of monetary policy, high credit risk, risk aversion, and the high labour cost contribute to the high spread of banks in SSA. The results also reveal that a spread among banks with market power is significantly more sensitive to the monetary policy changes. The overall results suggest that banks in Africa gain from monetary policy shocks.

Suggested Citation

  • Mohammed Amidu, 2015. "Do Banks In Sub-Saharan Africa With Market Power Benefits From Monetary Policy?," The African Finance Journal, Africagrowth Institute, vol. 17(2), pages 1-24.
    • Handle: RePEc:afj:journl:v:17:y:2015:i:2:p:1-24
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    Citations

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    Cited by:

    1. Vera Ogeh Lassey Fiador & Mohammed Amidu, 2021. "Inclusive finance, bank pricing behaviour, and livelihood activities of households in Ghana," SN Business & Economics, Springer, vol. 1(1), pages 1-29, January.

    More about this item

    Keywords

    Spread; intermediation; market power; monetary policy; SSA;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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