Journal Screenshot

International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

The Efficiency of Bank Cost, Capital, and Risk in Africa: A Review and Evaluation of Patterns

Traore Ibrahima, Zunaidah Sulong

http://dx.doi.org/10.6007/IJARBSS/v8-i12/5053

Open access

The cyclical routine of banking crisis around the globe is a central debate among scholars and researchers. Lack of a proper adjustment between banks cost efficiency, capital, and risk has been suggested by many studies as the main source of these panics. Thus, a proper selection and measurement of determinants of the efficiency of banks' cost, capital, and risk to measure impacts of the relationship is the linchpin for any banks’ long-term survival, stability, and growth.
The purpose of present paper is to unsympathetically review and evaluate current state and patterns of the connection among the efficiency of banks’ cost, risk and capital by reviewing or assessing up to date published studies on this relationship of banks in Africa.
The concluding remarks from this review study are significant to academic research, policies, and practices about the mentioned relationship.

Abdul, M. & Izah, M, T, (2013). "The Interrelationship between Bank Cost Efficiency, Capital and Risk-Taking in ASEAN Banking", International Journal of Economics and Management Sciences, 2, 12, 1-15. Available at SSRN: http://ssrn.com/abstract=.

Anderson, S. (2013). A history of the past 40 years in financial crises. International Financing Review Special Report, (2000).

Ayadi, R., Arbak, E., Naceur, S. B., & De Groen, W. P. (2015). Financial Development, Bank Efficiency, and Economic Growth Across the Mediterranean. In Economic and Social Development of the Southern and Eastern Mediterranean Countries (pp. 219-233). Springer International Publishing.

Aggarwal, R., & Jacques, K. T. (1998). Assessing the impact of prompt corrective action on bank capital and risk. Federal Reserve Bank of New York Economic Policy Review, 4(3), 23-32.

Altunbas, Y., Carbo, S., Gardener, E. P., & Molyneux, P. (2007). Examining the relationships between capital, risk and efficiency in European banking. European Financial Management, 13(1), 49-70.

Altunbas, Y., Liu, M. H., Molyneux, P., & Seth, R. (2000). Efficiency and risk in Japanese banking. Journal of Banking & Finance, 24(10), 1605-1628.

Barth, J. R., Caprio, G., & Levine, R. (2004). Bank regulation and supervision: What works best? Journal of Financial Intermediation, 13(2), 205-248.
Bashir, A., & Hassan, A. (2017). Interrelationship Among Basel Capital Regulation, Risk, and Efficiency in Pakistani Commercial Banks. Business & Economic Review, 9(2), 165-186

Berger, A. N., & De Young, R. (1997). Problem loans and cost efficiency in commercial banks. Journal of Banking & Finance, 21(6), 849-870.

Berger, A. N., & Di Patti, E. B. (2006). Capital structure and firm performance: A new approach to testing agency theory and an application to the banking industry. Journal of Banking & Finance, 30(4), 1065-1102.

Biekpe, N. (2011). The competitiveness of commercial banks in Ghana. African Development Review, 23(1), 75-87.

Bruno, V., & Shin, H. S. (2015). Capital flows and the risk taking channel of monetary policy. Journal of Monetary Economics, 71, 119-132.

Carbó, S., Humphrey, D., Maudos, J., & Molyneux, P. (2009). Cross-country comparisons of competition and pricing power in European banking. Journal of International Money and Finance, 28(1), 115-134.

Das, A., & Ghosh, S. (2004). Risk, capital and operating efficiency: Evidence from Indian public sector banks. Indian Journal of Economics and Business, 1(3), 147-164

de Guevara, J. F., Maudos, J., & Pérez, F. (2007). Integration and competition in the European financial markets. Journal of International Money and Finance, 26(1), 26-45.

Dong, Y., Firth, M., Hou, W., & Yang, W. (2015). Evaluating the performance of Chinese commercial banks: A comparative analysis of different types of banks. European Journal of Operational Research.

Diamond, D. W. (1984). Financial intermediation and delegated monitoring. The Review of Economic Studies, 51(3), 393-414.

Fama, E. F. (1980). Banking in the Theory of Finance. Journal of Monetary Economics, 6(1), 39-57.
Fiordelisi, F., Marques-Ibanez, D., & Molyneux, P. (2011). Efficiency and risk in European Banking. Journal of Banking & Finance, 35(5), 1315–1326.

Fofack, H. (2005). Nonperforming loans in Sub-Saharan Africa: Causal analysis and macroeconomic implications. World Bank Policy Research Working Paper, 3769.

Greene, J. C. (2006). Toward a methodology of mixed methods social inquiry. Research in the Schools, 13(1), 93-98.

Gujarati, D. N. (2009). Basic econometrics. (4th Ed.). London: McGraw-Hill.

Gup, B. E., Avram, K., Beal, D., Lambert Rod, and Kolari, W. J. (2007). Commercial Banking. The Management of Risk. John Wiley & Sons Australia, Ltd

Habib, M. U. (2012). Musharraf Era, Martial Law and major reforms. Retrieved October 02, 2016, from http://www.hamariweb.com/articles/article. aspx? Id = 21991

Haq, M., Faff, R., Seth, R., & Mohanty, S.

In-Text Citation: (Ibrahima & Sulong, 2018)
To Cite this Article: Ibrahima, T., & Sulong, Z. (2018). The Efficiency of Bank Cost, Capital, and Risk in Africa: A Review and Evaluation of Patterns. International Journal of Academic Research in Business and Social Sciences, 8(12), 538–546.