Description |
1 online resource (43 pages) : color illustrations |
Series |
IMF working paper ; WP/15/210 |
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IMF working paper ; WP/15/210.
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Summary |
The paper analyzes the relationship between bank competition and stability, with a specific focus on the Middle East and North Africa. Price competition has a positive effect on bank liquidity, as it induces self-discipline incentives on banks for the choice of bank funding sources and for the holding of liquid assets. On the other hand, price competition may have a potentially negative impact on bank solvency and on the credit quality of the loan portfolio. More competitive banks may be less solvent if the potential increase in the equity base---due to capital adjustments---is not large enough to compensate for the reduction in bank profitability. Also, banks subject to stronger competitive pressures may have a higher rate of nonperforming loans, if the increase in the risk-taking incentives from the lender's side overcomes the decrease in the credit risk from the borrower's side. In both cases, country-specific policies for market entry conditions---and for bank regulation and supervision---may significantly affect the sign and the size of the relationship. The paper suggests policy reforms designed to improve market contestability and to increase the quality and independence of prudential supervision. --Abstract |
Notes |
"September 2015." |
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"Middle East and Central Asia." |
Bibliography |
Includes bibliographical references (pages 30-31) |
Notes |
Online resource; title from pdf title page (IMF.org Web site, viewed October 8, 2015) |
Subject |
Banks and banking -- Middle East
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Bank liquidity -- Middle East
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Bank failures -- Middle East
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Banks and banking -- State supervision -- Middle East
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Financial risk management -- Middle East
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Banks and banking -- Africa, North
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Bank liquidity -- Africa, North
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Bank failures -- Africa, North
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Banks and banking -- State supervision -- Africa, North
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Financial risk management -- Africa, North
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Bank failures
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Bank liquidity
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Banks and banking
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Banks and banking -- State supervision
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Financial risk management
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North Africa
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Middle East
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Form |
Electronic book
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Author |
Ben Naceur, Samy, author.
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Scopelliti, Alessandro Diego, author.
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International Monetary Fund. Middle East and Central Asia Department.
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ISBN |
1513581910 |
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9781513581910 |
ISSN |
1018-5941 |
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