Concurrence bancaire et stabilité financière en Afrique subsaharienne.

Abstract

The objective of this study is to examine the relationship between banking competition and financial stability in sub-Saharan Africa. Specifically, the aim is to show the direct effects of banking competition on financial stability and to show the indirect effects of banking competition on financial stability To achieve this, we conducted our study over a period of 1996-2017 and over 15 countries. The model used GMM dynamic as it incorporates the lagged variable. The analysis of the effects of banking competition on financial stability leads us to carry out preliminary tests including descriptive analysis, the correlation matrix and estimates of direct and indirect effects. • Banking competition has a negative and significant effect at a 5% threshold on financial stability. This means that an increase in banking competition worsens financial stability in sub-Saharan African countries. • Banking competition has a negative and significant effect at a 1% threshold on financial instability therefore an increase in banking competition improves financial stability in terms of non-performing loans. Competition has differential effects on financial stability as an increase in the z-score indicator improves financial stability while an increase in the non-performing loan indicator worsens financial stability.