Bank Opacity and Risk-Taking: The Moderating Role of Competition

Bekir, Omnia Mostafa Mohamed; El-kheer, Modather Taha Abo; Ganna, Mona Atef

doi:10.21608/abj.2023.334155

Bank Opacity and Risk-Taking: The Moderating Role of Competition

المؤلفون

¹ Faculty of Commerce Tanta University

² Professor of Financial Accounting, and Former Vice-President of Tanta University for Education and Student Affairs

³ Lecturer of Accounting Faculty of Commerce Tanta University

10.21608/abj.2023.334155

المستخلص

Purpose: This study examines the influence of bank opacity on banks’ risk-taking. It also investigates whether bank competition can affect the strength of the relationship between bank opacity and risk-taking.
Design/Methodology/Approach: Using annual data obtained from 9 listed Egyptian banks over the 2010 – 2019 period (10 years), the study assessed risk-taking using Z-score, bank opacity utilizing the ratio of Available-For-Sale (AFS) securities to Total Assets (TA), and competition is measured by Lerner Index. The Random Effect Generalized Least Square (RE GLS) model is utilized for empirical analysis.
Findings: Results show that bank opacity has a negative insignificant effect on the financial stability of banks. Competition also has a negative insignificant effect on banks’ stability. However, bank competition positively and significantly moderates the relationship between bank opacity and risk-taking.
Originality/Value: The study contributes to the banking literature by offering evidence on opacity-related issues after the Global Financial Crisis (GFC) and the January 25th and June 30th uprisings in Egypt

الكلمات الرئيسية