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The Effect Of Banking Competition On Financial Stability In Central African Economic And Monetary Community Zone

Author

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  • MAMADOU ASNGAR, Thierry

    (Department of Economics, University of N’Djamena, Chad.)

  • ONGO NKOA, Bruno Emmanuel

    (Department Development Economics, University of Dschang, Cameroon.)

  • WIRAJING, Muhamadu Awal Kindzeka

    (Department Development Economics, University of Dschang, Cameroon.)

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.

Suggested Citation

  • MAMADOU ASNGAR, Thierry & ONGO NKOA, Bruno Emmanuel & WIRAJING, Muhamadu Awal Kindzeka, 2022. "The Effect Of Banking Competition On Financial Stability In Central African Economic And Monetary Community Zone," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 26(1), pages 23-50, March.
    • Handle: RePEc:vls:finstu:v:26:y:2022:i:1:p:23-50
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    References listed on IDEAS

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    Cited by:

    1. JIMA, Meshesha Demie & MAKONI, Patricia L., 2022. "Determinants Of Financial Stability In Sub-Saharan Africa," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 26(3), pages 55-75, September.
    2. Muhamadu Awal Kindzeka Wirajing & Tii N. Nchofoung & Felix Mejame Etape, 2023. "Revisiting the human capital–economic growth nexus in Africa," SN Business & Economics, Springer, vol. 3(7), pages 1-29, July.

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    More about this item

    Keywords

    banking industry; financial system; non-performing loans ratio; bank Z-score;
    All these keywords.

    JEL classification:

    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • 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
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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