TITLE:
The Impact of Bank Regulation on Bank Performance: A Novel Analysis of the Pre-Covid Era with Cross-Country Evidence
AUTHORS:
Ayodeji Michael Obadire, Katlo Obadire
KEYWORDS:
African Nations, Banks, Basel III Accord, Financial Performance, Global Financial Crisis, Panel Data
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.13 No.3,
March
27,
2023
ABSTRACT: Banks play a pivotal role in
all economies by bringing balance to the economic flows of surplus and deficit.
As a result of this, they are heavily regulated by national and globally accepted
regulations such as the Basel III Accord. This research aims to ascertain the impact
of the prudential Basel III regulations on the financial performance of selected
listed African banks before the advent of Covid-19. The study used the fixed effects
and random effect estimator to fit the static panel data established for the study.
A panel of 45 listed banks from six African nations were used, covering the period
from 2010 to 2019. The study concludes that the adoption of tighter and higher Basel
III regulatory requirements has a double-edged-two-face implication on African banks’
financial performance. This conclusion is based on the findings that the capital
adequacy ratio has a positive effect on the financial performance of African banks
while the liquidity and minimum capital requirement have a negative effect.