Determinants of financial stability of commercial banks in ghana

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The current Ghanaian banking crisis prompted the research to examine commercial bank financial stability determinants. (Seventeen) 17 selected commercial banks were selected based on available data and the panel research design was used to obtain data for the selected banks between 2016 and 2019. The results from the model estimate show that the capital adequacy ratio negatively impacts financial stability, but was not significant. Interest cover ratio negatively and significantly affects financial stability. Bank lending rate is shown to negatively and significantly affect financial stability. In addition, financial stability is negatively and significantly impacted by the efficiency of banks. The result also shows that GDP, inflation, and interest rates negatively affected the stability of banks but were insignificant. The study thus concludes that concluded that bank efficiency, debt repayment and lending behavior are major factors that accounted for the general instability of the banks during the period.
A thesis submitted to the Department of Accounting and Finance, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfilment of the requirements for the award degree of Msc. Accounting and Finance