Banking in the Middle East and North Africa : market conditions, soundness, contagion and convergence

• Main Author: Issa, Samah A.
• Published: University of Essex 2013
• Subjects: 332.1
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.635984

This thesis consists of three substantive essays on the financial and banking sectors in the Middle East and North Africa (MENA) region, each constituting a separate chapter. The first essay (Chapter 2) investigates the relationship between banking market concentration and competition levels and the soundness of Islamic and conventional banks operating in MENA. The study employs a dataset of 152 banks across 10 MENA countries (40 Islamic and 112 conventional) over 2004-2009. We find that MENA's banking concentration and competition levels are negatively related to banks' soundness. Our evidence also shows that Islamic banks are less sound than their conventional counterparts, and that the Islamic nature of banks results in higher return on assets, capitalisation and volatility of profits. However no significant differences in competiveness between the two segments were observed.