Journal of Management Policies and Practices

An Empirical Study on Government Regulation, Bank Risk and Bank Performance: Case of Mali
Kone Abdrahamane, Liquan Xi, Bah Boubacar Alpha, Mohamed Kargbo

Abstract
The performance of the banking sector for most Sub-Saharan African Countries in the 1990s was weak and faced low level of capital mobilization for productive investment. This is the case for the economy of Mali. Given the negative ramification of banking risk of default and performance on economic growth, we examine the moderating role of government regulation on bank risk and performance in Mali from 1998-2013, using Panel Least Square regression approach. This study reveals that all the independent variables are statistically significance at the 5% and 10%, except inflation which is found to be insignificant, and that banks takes high risk when blanket guarantee scheme and lower capital requirement are in force, and takes low risk when blanket guarantee scheme with higher capital adequacy requirement are instituted. To avoid risk contagion, it is necessary that the government of Mali institutes optimal level of capital adequacy requirements.

Full Text: PDF     DOI: 10.15640/jmpp.v5n1a1