The Impact of National Bank of Ethiopia Directives on the Profitability and of Private Bank the Case of National Bank of Ethiopia Bill Purchase Requirement
| dc.contributor.advisor | Yitayew, Abebe(PhD) | |
| dc.contributor.author | Yesuf, Shimels | |
| dc.date.accessioned | 2018-06-29T11:39:12Z | |
| dc.date.accessioned | 2023-11-04T07:57:23Z | |
| dc.date.available | 2018-06-29T11:39:12Z | |
| dc.date.available | 2023-11-04T07:57:23Z | |
| dc.date.issued | 2016-01 | |
| dc.description.abstract | The financial system plays a pivotal role in economic activities in any country. Thus it is vital to determine the status and assess the financial health of the financial system and take corrective policy measures continuously. The main objective of the study is to examine the impact of National Bank of Ethiopia directive: NBE bill purchase requirement on the performance and liquidity of private commercial banks. Balanced fixed effect panel regression was used for the data of eight private commercial banks in the sample covered the period from 2007 to 2014 with a total of 64 observations. The study finds that purchasing NBE bill had a negative and significant impact of the profitability of private commercial banks in Ethiopia. However, the magnitude is not severe to result in loss. Moreover, the pre and post policy periods comparison revealed that a relatively better profitability record for private commercial banks during the time of policy restrictions by way of clearing the excess liquidity holding of banks, diversify other fee generating services and the cost related to bill purchase to some extent seems covered by the borrowers (stable liability prices and banks discretion to adjust their asset prices). Similarly the requirement of purchasing NBE bill had negative and significant impact on the liquidity of private commercial bank in Ethiopia. In addition the pre and post periods comparison revealed liquidity of private commercial banks decreased after requirement. This is due to the fact that the requirement of purchasing NBE bill has a possibility of creating maturity mismatches because Private Banks collect savings mostly at two to three-year maturity and even shorter in some cases and fulfilling the 27 percent requirement means that they have to freeze these resources for 5 years. Key words: government intervention, liquidity, NBE bill, profitability; private banks, regulation, supervision | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/123456789/5028 | |
| dc.language.iso | en_US | en_US |
| dc.publisher | Addis Ababa University | en_US |
| dc.subject | Government intervention | en_US |
| dc.subject | Liquidity | en_US |
| dc.subject | NBE bill | en_US |
| dc.subject | Profitability | en_US |
| dc.subject | private banks | en_US |
| dc.subject | Regulation | en_US |
| dc.subject | Supervision | en_US |
| dc.title | The Impact of National Bank of Ethiopia Directives on the Profitability and of Private Bank the Case of National Bank of Ethiopia Bill Purchase Requirement | en_US |
| dc.type | Thesis | en_US |