Bank ownership, regulation and efficiency: Perspectives from the Middle East and North Africa (MENA) Region

This paper examines the effects of bank regulation and ownership on the efficiency of banks in the emerging MENA region. The public and private view of bank regulation is tested along with the interaction of bank regulation and ownership. Results support the public view of bank regulation and sugges...

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Bibliographic Details
Published in:International review of economics & finance 2017-01, Vol.47, p.273-293
Main Authors: Haque, Faizul, Brown, Kym
Format: Article
Language:English
Subjects:
Bank efficiency
Bank regulation
MENA
Ownership
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Summary:This paper examines the effects of bank regulation and ownership on the efficiency of banks in the emerging MENA region. The public and private view of bank regulation is tested along with the interaction of bank regulation and ownership. Results support the public view of bank regulation and suggest that both ownership concentration and supervisory power individually and interactively exert a positive influence on cost efficiency. Moreover, government ownership, capital stringency and market power have positive effects on cost efficiency, whereas activity restrictions and deposit insurance have opposite effects. Capital regulation and supervisory power improvements occurred since Basel II. •Considers effects of bank regulation and supervision on bank efficiency in MENA.•Public rather than private view of bank regulation supported with cost efficiency.•Despite imperfect market competition, positive effects on cost/profit efficiency.•Ownership concentration had positive effects but government owned results mixed.•Positive improvements since the global crisis in a number of areas.
ISSN:1059-0560
1873-8036
DOI:10.1016/j.iref.2016.10.015