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What lessons does the COVID-19 pandemic teach us about banking liquidity and information share in the CEMAC zone?

Author

Listed:
  • Djimoudjiel, Djekonbe
  • T. Rostand, Dany Dombu
  • MBATINA NODJI, NDILENGAR

Abstract

The objective of this study is to assess the effect of COVID-19 on the situation of excess liquidity in the CEMAC zone. The results are obtained using Bayesian estimates of VAR models on monthly data on banks ranging from 2000 to 2020 for countries in CEMAC. The main results suggest the shock generated by the COVID-19 pandemic on the economy of the sub-region has contributed to bogging down the situation of excess liquidity. Indeed, on the one hand, the shock on bank liquidity is greater in the short than in the long term. On the other hand, the situation under COVID-19 led to an increase in credit in the first 6 to 8 months of 2020 followed by a drop in the level of risk hedging capital. The health policies adopted and the ensuing recession, on the other hand, significantly affected the level of bank deposits. The main recommendations consist of reducing the climate of information asymmetry by encouraging the implementation of credit registers and establishing policies to help borrowers.

Suggested Citation

  • Djimoudjiel, Djekonbe & T. Rostand, Dany Dombu & MBATINA NODJI, NDILENGAR, 2024. "What lessons does the COVID-19 pandemic teach us about banking liquidity and information share in the CEMAC zone?," MPRA Paper 119666, University Library of Munich, Germany, revised 17 Jan 2024.
    • Handle: RePEc:pra:mprapa:119666
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    References listed on IDEAS

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    More about this item

    Keywords

    Excess liquidity; Information sharing ; COVID-19; BVAR; CEMAC.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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