To read this content please select one of the options below:

Capital regulation, liquidity risk, efficiency and banks performance in emerging economies

Nicholas Addai Boamah (Department of Accounting and Finance, KNUST School of Business, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)
Emmanuel Opoku (Department of Accounting and Finance, KNUST School of Business, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)
Augustine Boakye-Dankwa (Department of Accounting and Finance, KNUST School of Business, Kwame Nkrumah University of Science and Technology, Kumasi, Ghana)

Journal of Financial Regulation and Compliance

ISSN: 1358-1988

Article publication date: 14 June 2022

Issue publication date: 9 January 2023

708

Abstract

Purpose

This study aims to examine the descriptive capabilities of efficiency, liquidity risk and capital risk for the cross-sectional and time-series variations in banks’ performance across emerging economies (EEs). It also examines the impact of the 2008 global financial crisis (GFC) on the effects of capital, liquidity and efficiency on banks’ performance.

Design/methodology/approach

The paper adopts a spatial panel model and collects data across 90 EEs.

Findings

The study shows that a surge in efficiency and liquidity improves bank performance. In addition, banks that finance credit creation primarily with core deposits perform better. Also, banks in EEs responded to the GFC. The findings show that banks in EEs respond to global events emanating from the developed economies. This indicates that EEs banks are relatively integrated with banks in developed markets.

Originality/value

Improvement in profit efficiency and effective liquidity and capital risk management enhance the performance of EEs banks.

Keywords

Citation

Boamah, N.A., Opoku, E. and Boakye-Dankwa, A. (2023), "Capital regulation, liquidity risk, efficiency and banks performance in emerging economies", Journal of Financial Regulation and Compliance, Vol. 31 No. 1, pp. 126-145. https://doi.org/10.1108/JFRC-09-2021-0076

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

Related articles