Information Sharing Regulation Introduction and Bank Industry Performance: A Pre and Post Analyses from Ghana
Journal of Finance and Accounting
Volume 3, Issue 5, September 2015, Pages: 164-171
Received: Aug. 28, 2015;
Accepted: Sep. 9, 2015;
Published: Sep. 18, 2015
Views 3261 Downloads 84
Baah Aye Kusi, University of Ghana Business School, Department of Finance, Ghana-Accra, Legon
Kwadjo Ansah-Adu, Valley View University Banking and Finance Department, Ghana-Oyibi
Isaac Owusu-Dankwa, Valley View University Banking and Finance Department, Ghana-Oyibi
This study assessed credit growth, asset quality and profitability in the banking industry of Ghana during pre and post information sharing eras. The study employed industry level financial ratios to derive means, standard deviations and pearson correlations. The study further employed t-test to test for significant difference in bank performance during pre and post information sharing ears. The results indicate that the Ghanaian banking industry improved in all profitability measure during post-information sharing era. Also, deteriorating asset quality measures were stabilized during post-information sharing era. Furthermore, the study finds that there was a significant difference in non - performing loans ratio in the two information sharing eras. These findings are consistent with earlier findings. Hence the study recommends the establishment of Information Sharing Institutions (ISI), expanding the coverage of ISI and publicizing information sharing in emerging economies so as to strengthen the stability and soundness of the banking system.
Baah Aye Kusi,
Information Sharing Regulation Introduction and Bank Industry Performance: A Pre and Post Analyses from Ghana, Journal of Finance and Accounting.
Vol. 3, No. 5,
2015, pp. 164-171.
Bank of Ghana. (February 2013). Financial stability report. Volume 5 no. 1/2013, Accra, Ghana.
Bank of Ghana. (November 2014). Financial stability report. Volume 5 no. 2/2014, Accra, Ghana.
Beck, T. and Levine, R., (2004). Stock Markets, Banks and Growth: panel evidence. Journal Banking and Finance. 28, 423–442.
Behr, P. and Sonnekalb, S. (2012). The effect of information sharing between lenders on access to credit, cost of credit and loan performance – Evidence from a credit registry introduction. Journal of Banking and Finance 36 (2012) 3017-3032.
Bennardo, A., Pagano, M., Piccolo, S., (2009). Multiple-bank lending, creditor rights and information sharing. Mimeo, University of Salerno.
Bourke, P. (1989). Concentration and other determinants of bank profitability in Europe, North America and Australia. Journal of Banking and Finance, 13(1), 65-79.
Bouyon, S. (2014). The impact of Bnaking structural Reforms on Household Retail Finance. European Credit Institution Commentary No. 13.
Brooks, C. (2008). Introductory Econometrics for Finance (2nd Ed.). Cambridge University press.
Brown, M., and Zehnder, C., (2007). Credit reporting, relationship banking, and loan repayment. J. Money, Credit, Banking 39, 1884–1918.
Brown, M., Jappelli, T., Pagano, M., (2009). Information sharing and credit: firm-level evidence from transition countries. Journal of Financial Intermediation 18, 151– 172.
Crotty, J. (2008). ‘Structural Causes of the Global Financial Crisis: A Critical Assessment of the New Financial Architecture’, Political Economy Research Institute (PERI) Working Paper no. 180, available at www.peri.umass.edu.
Dietrich, J. (1996). Financial Services and Financial Institutions: Value Creation in Theory and Practice Prentice Hall.
Djankov, S., McLiesh, C., Shleifer, A., 2007. Private credit in 129 countries. Journal of Financial Economics 84, 299–329.
Fujii, H., Managi, S. and Matousek, R. (2014). Indian bank efficiency and productivity changes with undesirable outputs: A disaggregated Approach. Journal of Banking and Finance 38(2014) 41-50.
Gamra, S. B. (2009). “Does financial liberalization matter for emerging East Asian economies growth? Some new evidence.” International Review of Economics and Finance, 18:392-403.
Gilbert, E., Calitz, E., Plessis, S., (2009). Prudential regulation, its international background and the performance of the banks a critical review of the South African environment since 1970. Economic History of Developing Regions 24 (2), pp 43 — 81.
International Monetary Fund. (2011). Ghana: Financial system stability assessment update. IMF Country Report No.11/131, International Monetary Fund, Washington, D. C..
Jappelli, T. and Pagano, M. (2006). Role and effects of credit information sharing. In: Bertola, G., Disney, R., Grant, C.and (Eds.), The Economics of Consumer Credit. MIT Press, Cambridge, pp. 347–371.
Jappelli, T., Pagano, M.and Bianco, M. (2005). Courts and banks: Effects of judicial enforcement on credit markets. J. Money, Credit, Banking 37, 223–244.
Jappelli, T.and Pagano, M. (2002). Information sharing, lending and defaults: Cross-country evidence. J. Banking Finance 26, 2017–2045.
Kallberg, J. G. and Udell, G. F. (2003). The value of private sector credit information. J. Banking Finance 27, 449–469.
Kargbo, S. M. and Adamu, P. A. (2009). Financial Development and Economic Growth in Sierra Leone. Journal of Monetary and Economic Integration 9 (2009) 2.
Kumbirai, M. and Webb R. (2010). A financial Ratio Analysis of Commerial Bank Performance in South Africa. African Review of Economics and Finance Vol 2 (1).
Hempel, G., Simonson, D., and Coleman, A. (1994). Bank Management: Text and Cases. 4th Edition, John Wiley & Sons, Inc.
Love I. and Mylenko, N., (2003). Credit reporting and financing constraints. World Bank Policy Research Working paper 3142.
Luoto, J., McIntosh, C., and Wydick, B., (2007). Credit information systems in less-developed countries: Recent history and a test. Econ. Devel. Cult. Change 55, 313–334.
Murinde V., and H. Yaseen, (2006). The Impact of Basle Accord Regulations on Bank Capital and Risk Behaviour: 3D Evidence from the Middle East and North Africa (MENA) Region. University of Birmingham.
Padilla, A. J. and Pagano, M. (2000). Sharing default information as a borrower discipline device. Europ. Econ. Rev. 44, 1951–1980.
Padilla, A. J. and Pagano, M., (1997). Endogenous communication among lenders and entrepreneurial incentives. Rev. Finan. Stud. 10,205–236.
Pagano, M., and Jappelli, T. (1993). Information sharing in credit markets. J. Finance 43, 1693–1718.
Powell, A., Mylenko, N., Miller, M. and Majnoni, G. (2004). Improving credit information, bank regulation and supervision: On the role and design of public credit registries. Policy.
Samad, A. (2004). Bahrain Commercial Bank’s Performance during 1994-2001.Credit and Financial Management Review 10(1) pp 33-40.
Vickers, J. (2012), “Some economics of banking reform”, Department of Economics, University of Oxford, Discussion Paper Series, No. 632, November.
Wooldridge, J. (2008). Introductory Econometrics: A Modern Approach, 4th edition. Mason, OH: South-Western Cengage Learning.
World Bank (2012). Doing Business Indicators in 2012. Oxford Univ. Press, Oxford.