Abstract

This paper examines the effects of bank regulation and ownership on the efficiency of banks in the emerging MENA region. The public and private view of bank regulation is tested along with the interaction of bank regulation and ownership. Results support the public view of bank regulation and suggest that both ownership concentration and supervisory power individually and interactively exert a positive influence on cost efficiency. Moreover, government ownership, capital stringency and market power have positive effects on cost efficiency, whereas activity restrictions and deposit insurance have opposite effects. Capital regulation and supervisory power improvements occurred since Basel II.

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