Browsing by Author "Boru, Tesfaye"

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    The Impact of Financial Liberalization on the Ownership Market Structure and Performance of the Ethiopian Banking Industry
    (A.A.U, 2007-07) Boru, Tesfaye; Dash, C.D. (Professor)
    Ensuring the efficiency and stability of the banking system can play a vita l role for the successful implementation of the monetary and eco no mi c policies of a country. Yet, to ac hi eve such objective it would be essential to place financial reform measures that enhance the contribution of the banking system to wards economic development. An emblematic reform measure undertaken by the Ethiopian government commencing the year 1992 was "liberalizing " the financial sector. The aim of the study is to assess the impact of financial liberalization on the ownership structure, market concentration and profitability performance of the Ethiopian banking industry. The stud y found out that the reform ha s brought a lot of remarkable changes on the structure and performance of the banking sector as compared with the situations prevalent before the reform period. However, the reform ha s restricted the advantages that could be obtained from a diversified ownership structure via prohibiting operation of foreign banks and participation of the private sector to the ownership of government banks. Furthermore ,as tested by both two firm concentration ratio and HHI us in g total deposit s, loan s, ca pit a l and assets, the banking industry in Ethiopia can still be distinguished by it s mark et concentrate on toward s the big government owned commercial bank s and by a market characterized by little and insufficient competition. The profitability of the industry ha s also shown a tremendous improvement after the reform measure has bee n taken. However . the existing government bank s are enjoying having the higher share o f' relist from the industry and still the pattern of the industry profit is following the profitability structure of the giant bank, CBE. The study identified and recommended areas that need further liberalization measures so as to enhance the performance of the industry. Yet, it should be sec n as a first step , not the last word in this direction.
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    The Impact of Financial Liberalization on the Ownership, Market Structure and Performance of the Ethiopian Banking Industry
    (Addis Ababa University, 2007-08) Boru, Tesfaye; Dash, Chakradhar (Prof)
    Ensuriing tthe effiiciiency and sttabiilliitty of tthe bankiing systtem can pllay a viittall rolle for tthe successfull iimpllementtattiion of tthe monettary and economiic polliiciies of a counttry.. Yett,, tto achiieve such objjecttiive iitt woulld be essenttiiall tto pllace fiinanciiall reform measures tthatt enhance tthe conttriibuttiion of tthe bankiing systtem ttowards economiic devellopmentt.. An embllemattiic reform measure underttaken by tthe Etthiiopiian governmentt commenciing tthe year 1992 was “lliiberalliiziing “tthe fiinanciiall secttor.. The aiim of tthe sttudy iis tto assess tthe iimpactt of fiinanciiall lliiberalliizattiion on tthe ownershiip sttructture,, markett concenttrattiion and profiittabiilliitty performance of tthe Etthiiopiian bankiing iindusttry.. The sttudy found outt tthatt tthe reform has broughtt a llott of remarkablle changes on tthe sttructture and performance of tthe bankiing secttor as compared wiitth tthe siittuattiions prevallentt before tthe reform periiod.. However,, tthe reform has resttriictted tthe advanttages tthatt coulld be obttaiined from a diiversiifiied ownershiip sttructture viia prohiibiittiing operattiion of foreiign banks and parttiiciipattiion of tthe priivatte secttor tto tthe ownershiip of governmentt banks.. Furtthermore ,,as ttestted by botth ttwo fiirm concenttrattiion rattiio and HHI usiing ttottall deposiitts,, lloans,, capiittall and assetts,, tthe bankiing iindusttry iin Etthiiopiia can sttiillll be diisttiinguiished by iitts markett concenttrattiion ttowards tthe biig governmentt owned commerciiall banks and by a markett charactteriized by lliittttlle and iinsuffiiciientt compettiittiion.. The profiittabiilliitty of tthe iindusttry has allso shown a ttremendous iimprovementt aftter tthe reform measure has been ttaken.. However,, tthe exiisttiing governmentt banks are enjjoyiing haviing tthe hiigher share of profiitt from tthe iindusttry and sttiillll tthe pattttern of tthe iindusttry profiitt iis follllowiing tthe profiittabiilliitty sttructture of tthe giiantt bank,, CBE.. The sttudy iidenttiifiied and recommended areas tthatt need furtther lliiberalliizattiion measures so as tto enhance tthe performance of tthe iindusttry.. Yett,, iitt shoulld be seen as a fiirstt sttep,, nott tthe llastt word iin tthiis diirecttiion..