Stress Tests, Bank Behaviour and Capital Adequacy: Evidence from Africa(Pages 1336-1345)
Osama Wagdia,*, Nahed Saad Ahmedb and Mostafa Yassinc
aDepartment of Finance and Accounting; School of Business, International Academy for Engineering and Media Science (IAEMS), Egypt. ORCID: 0000-0003-0451-9726; ResearcherID: D-4898-2019; Scopus Author ID: 57212470180.
bDepartment of Finance and Accounting; School of Business, International Academy for Engineering and Media Science (IAEMS), Egypt. ORCID:0000-0003-0990-3671.
cBusiness Administration Department; Faculty of Commerce and Business Administration, Helwan University, Egypt. ORCID: 0000-0002-8052-8563.
This study investigated banks' behaviour before and after stress tests, in addition to the approaches and methods of testing in nine African countries (Egypt, Ethiopia, Kenya, Namibia, Nigeria, South Africa, Sudan, Tanzania, and Zambia). Statistical tests were done through qualitative analysis between November 2021 and January 2022 for bankers. On the one hand, the survey was limited to bankers from 52 African banks, and on the other, quantitative analysis of annual based data from 2009 to 2020 for African banks according to the Banker Database for 21 banks. According to qualitative analysis, the study found a significant difference in banks' behaviour under stress tests by country. Additionally, a significant difference was found in the weight of stress test approaches by country. Bankers prefer to apply sensitivity tests to assess unsystematic risks over scenario tests to assess systematic risks. There are various obstacles to completing the stress test efficiently and effectively among the African countries. On the other hand, according to quantitative analysis, there is a significant difference in the capital adequacy ratio of African banks under stress scenarios among countries under investigation.
Bank behaviour, Stress test, Basel, African banker.
E44, G21, G28, N27.
How to Cite:
Osama Wagdi, Nahed Saad Ahmed and Mostafa Yassin. Stress Tests, Bank Behaviour and Capital Adequacy: Evidence from Africa. [ref]: vol.20.2022. available at: https://refpress.org/ref-vol20-a146/
Licensee REF Press This is an open access article licensed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, provided the work is properly cited.