The Impact of Financial Openness in Indicators of the Banking Sector Development "Arab Countries as a Model"
2022, Volume 41, Issue 135, Pages 51-71
AbstractProceeding from the main and important role played by the banking sector in the process of economic development, as one of the most important direct channels for activating the work of monetary and financing policy and implementing its objectives by achieving consistency and harmony between the macro and micro economy, by mobilizing savings from the financial surplus units and redirecting them to the fiscal deficit units in the form which ensures optimal allocation of resources, the study sought to attempt to reach a diagnosis the mechanism of the impact exchange rate fluctuations on the banking sector development, as well as building a quantitative model capable of estimating and interpreting the nature of the effects that exchange rate fluctuations can exert in the banking sector development in the Arab countries (Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman) for the period 1996-2019, adopted the methodology of what is known as pooled regression model (PRM), the fixed effect model (FEM) and the random effect model (REM) based on the Balanced Panel Data, the study found a difference in the impact of exchange rate fluctuations in the four models that express the dimensions of banking sector development, represented by banking depth (BD), expressed by the liquid liabilities index relative to GDP, and banking stability (BS) represented by Z-score index, and access to Banking services (BA), represented by the banking concentration index (the proportion of banking assets held by the top five banks), and banking efficiency (BE), expressed in the interest rate margin index.
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