Regulatory Requirements and Banks' Level of Risk

Abstract

This article evaluates the effect of prudential standards and good governance practices on the level of risk exposure of banks.
 
 Using banks in the West African Monetary Union (WAMU) as a framework for study, we conducted a study on a base of 14 banks from 2006 to 2017.
 
 Empirical analysis using a system of simultaneous equations reveals that changes in prudential regulation, as well as structural and functional changes at board level, result in an increase in banking risk.