Title: Bank supervision and bank profitability: the case of MENA countries

Authors: Faouzi Abdennour, Karim Ben Khediri

Addresses: Faculty of Economic Science and Management of Nabeul, Department of Economics, Campus Elmerezga 8000, Nabeul, Tunisia. ' CEROS, University Paris Ouest Nanterre La Defense, France; Faculty of Economic Science and Management of Nabeul, Department of Finance, Campus Elmerezga 8000, Nabeul, Tunisia

Abstract: Using a panel of Middle East and North Africa (MENA) banks, we examine the effect of on bank profitability in the 1999-2006 period. We find that supervision differences matter. Bank profitability tends to be higher in countries in which supervisors can take legal action against external auditors for negligence, in which the central bank is responsive for supervision. On the contrary, bank profitability is negatively related to the unification of financial supervision and the existence of Deposit Insurance (DI). Also, several bank characteristics and macroeconomic factors are significantly related to bank profitability.

Keywords: MENA banks; bank supervision; bank profitability; regulation; scope; supervision structure; supervision independence; Middle East and North Africa countries; legal action; external auditors; negligence; central banks; financial supervision unification; deposit insurance.

DOI: 10.1504/IJMEF.2010.035594

International Journal of Monetary Economics and Finance, 2010 Vol.3 No.4, pp.316 - 329

Published online: 01 Oct 2010 *

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