Does Financial Regulation Influence Bank Efficiency? A Study on UAE Banking Sector

Conference paper
Part of the Springer Proceedings in Business and Economics book series (SPBE)

Abstract

A well-functioning, stable, and efficient banking system contributes to the economic growth of a country. Financial regulation has been highlighted as an important factor which influences bank performance and safety as evidenced by some of the studies in the past. This study analyzes the relationship between financial regulation and bank efficiency in the UAE. First part of our study is modeled on DEA analysis and indicates an improvement in profit efficiency during the selected period. The second part of our study analyzed the impact of financial regulations on the banks’ efficiency using Tobit regression. The regulatory variables included for this are loan to deposit ratio, advances to stable resources, total capital adequacy ratio, tier 1 capital to risk-weighted assets (RWA), provision coverage, and loan loss provision.

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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of BusinessHigher Colleges of TechnologyDubaiUnited Arab Emirates
  2. 2.Business SchoolMiddlesex UniversityDubaiUnited Arab Emirates

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