Adjustment of commercial banks' interest rates and the effectiveness of monetary policy: evidence from Anglophone West Africa
- Authors: Bangura, Lamin
- Date: 2011
- Subjects: Monetary policy -- Africa, West , Banks and banking -- Africa, West , Interest rates -- Africa, West
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:951 , http://hdl.handle.net/10962/d1002685 , Monetary policy -- Africa, West , Banks and banking -- Africa, West , Interest rates -- Africa, West
- Description: Most central banks use short-term interest rates as their main instrument of monetary policy. It is assumed that a change in policy rate will influence interest rates set by commercial banks, but this is not usually the case. Commercial banks adjust their interest rates in response to changes in policy rate with lags, which make their interest rates sticky. Stickiness in commercial banks interest rates have been seen as an obstacle to the smooth transmission of monetary policy decisions. Despite the importance of the transmission process, little attention has been given to a systematic measurement of the degree of response of commercial banks‟ interest rates to changes in monetary policy stance in the Anglophone West African countries, specifically within the West African Monetary Zone (WAMZ) economies. Against this backdrop, this study explores the interest rate adjustment dynamics using monthly interest rate series on discount rate, treasury bill rate, commercial banks‟ deposit and lending rates from 1989 to 2009 (for Gambia, Nigeria and Sierra Leone) and from 2000 to 2009 (for Ghana). Specifically, the study set out to examine how lending and deposit rates respond to changes in the official rates and to see whether there is a convergence among the rates over time. Also, to examine the relative adjustment of commercial bank lending rates to changes in the official rate when there is disequilibrium. The analyses were twofold: a full sample period and a rolling window analysis. Following Cottarelli and Kourelis (1994), the study employed cointegration technique and an asymmetric error correction model to obtain the short-run and long-run parameters from which the error correction coefficients, mean adjustment lags and asymmetric mean adjustment lags were estimated. The results for the entire sample period revealed that the long-run pass-through in Nigeria was 81% and 67% for lending rates and deposit rates respectively. In Ghana, it was 66% and 69% for lending and deposit rates respectively. While in Sierra Leone, long-run pass-through was 62% and 72% for lending and deposit rates respectively. In Gambia, it was 50% and 40% for lending and deposit rates respectively. On the other hand, the short-run pass-through was found to be lower compared to the long-run pass-through: in Nigeria it was 66% and 47%; in Gambia, 26% and 29%; in Sierra Leone, 30% and 13%; and in Ghana, -6% and 35% for lending and deposit rates respectively in each country. The pass-through estimates for the rolling windows were mixed for short-run and long-run pass-through. The mean adjustment lags suggest that the speed of adjustment of Lending rates for full sample period were two, two, seven and twelve months in Nigeria, Ghana, Sierra Leone and Gambia respectively. While for deposit rates they were five, six, seven and eighteen for Ghana, Nigeria, Gambia and Sierra Leone respectively. The average speeds of adjustment for the rolling windows were four and five months for lending and deposit rates respectively. Weak evidence of convergence was found in lending and deposit rates in the short-run and long-run pass-through among the countries. However, the results suggest that the magnitude and speed of the pass-through amongst the countries on average were high compared to emerging Asian countries. Significant asymmetric adjustments were found in the lending rates for Gambia and Sierra Leone, while in Gambia and Nigeria there were asymmetries in deposit rates. Based on the evidence provided, interest rate pass-through is high in Nigeria and Ghana compared to Gambia and Sierra Leone and this calls for the harmonization of financial policies on the part of the financial authorities in the WAMZ. Viewed solely from an interest rate pass-through, the lack of convergence among the countries suggests that WAMZ is far from ready for a monetary union. The relatively low pass-through in some of the countries suggests rigidity in the banking system which may be due to underdevelopment of the system. Thus efforts geared toward strengthening the banking system and the financial system as whole would further enhance the prospect of a monetary union among them.
- Full Text:
- Authors: Bangura, Lamin
- Date: 2011
- Subjects: Monetary policy -- Africa, West , Banks and banking -- Africa, West , Interest rates -- Africa, West
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:951 , http://hdl.handle.net/10962/d1002685 , Monetary policy -- Africa, West , Banks and banking -- Africa, West , Interest rates -- Africa, West
- Description: Most central banks use short-term interest rates as their main instrument of monetary policy. It is assumed that a change in policy rate will influence interest rates set by commercial banks, but this is not usually the case. Commercial banks adjust their interest rates in response to changes in policy rate with lags, which make their interest rates sticky. Stickiness in commercial banks interest rates have been seen as an obstacle to the smooth transmission of monetary policy decisions. Despite the importance of the transmission process, little attention has been given to a systematic measurement of the degree of response of commercial banks‟ interest rates to changes in monetary policy stance in the Anglophone West African countries, specifically within the West African Monetary Zone (WAMZ) economies. Against this backdrop, this study explores the interest rate adjustment dynamics using monthly interest rate series on discount rate, treasury bill rate, commercial banks‟ deposit and lending rates from 1989 to 2009 (for Gambia, Nigeria and Sierra Leone) and from 2000 to 2009 (for Ghana). Specifically, the study set out to examine how lending and deposit rates respond to changes in the official rates and to see whether there is a convergence among the rates over time. Also, to examine the relative adjustment of commercial bank lending rates to changes in the official rate when there is disequilibrium. The analyses were twofold: a full sample period and a rolling window analysis. Following Cottarelli and Kourelis (1994), the study employed cointegration technique and an asymmetric error correction model to obtain the short-run and long-run parameters from which the error correction coefficients, mean adjustment lags and asymmetric mean adjustment lags were estimated. The results for the entire sample period revealed that the long-run pass-through in Nigeria was 81% and 67% for lending rates and deposit rates respectively. In Ghana, it was 66% and 69% for lending and deposit rates respectively. While in Sierra Leone, long-run pass-through was 62% and 72% for lending and deposit rates respectively. In Gambia, it was 50% and 40% for lending and deposit rates respectively. On the other hand, the short-run pass-through was found to be lower compared to the long-run pass-through: in Nigeria it was 66% and 47%; in Gambia, 26% and 29%; in Sierra Leone, 30% and 13%; and in Ghana, -6% and 35% for lending and deposit rates respectively in each country. The pass-through estimates for the rolling windows were mixed for short-run and long-run pass-through. The mean adjustment lags suggest that the speed of adjustment of Lending rates for full sample period were two, two, seven and twelve months in Nigeria, Ghana, Sierra Leone and Gambia respectively. While for deposit rates they were five, six, seven and eighteen for Ghana, Nigeria, Gambia and Sierra Leone respectively. The average speeds of adjustment for the rolling windows were four and five months for lending and deposit rates respectively. Weak evidence of convergence was found in lending and deposit rates in the short-run and long-run pass-through among the countries. However, the results suggest that the magnitude and speed of the pass-through amongst the countries on average were high compared to emerging Asian countries. Significant asymmetric adjustments were found in the lending rates for Gambia and Sierra Leone, while in Gambia and Nigeria there were asymmetries in deposit rates. Based on the evidence provided, interest rate pass-through is high in Nigeria and Ghana compared to Gambia and Sierra Leone and this calls for the harmonization of financial policies on the part of the financial authorities in the WAMZ. Viewed solely from an interest rate pass-through, the lack of convergence among the countries suggests that WAMZ is far from ready for a monetary union. The relatively low pass-through in some of the countries suggests rigidity in the banking system which may be due to underdevelopment of the system. Thus efforts geared toward strengthening the banking system and the financial system as whole would further enhance the prospect of a monetary union among them.
- Full Text:
The strategic management of intellectual capital : a case study in the banking and financial services sector in Zambia
- Authors: Banda, Japhet Mathias
- Date: 2011
- Subjects: Intellectual capital -- Management , Intellectual capital -- Zambia , Banks and banking -- Zambia , Financial services industry -- Management -- Zambia
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1178 , http://hdl.handle.net/10962/d1002795 , Intellectual capital -- Management , Intellectual capital -- Zambia , Banks and banking -- Zambia , Financial services industry -- Management -- Zambia
- Description: Fundamental changes in the global economy are changing the basis of organisational competitive advantage. The challenge in attaining a competitive advantage is characterised by factors such as increased competition, market volatility, geographically dispersed operations, customer awareness, raising workforce diversity and stringent regulatory regimes. These factors have driven, and in turn have been driven by, an increasing complexity of products, services and the processes that create value, resulting in changes in the structural and functional dimensions of the organisation. Business executives and academics recognise the shift in value creating assets from the traditional land, labour and capital to intangible assets such as knowledge and information becoming the most important resources an organisation can muster.The combination and integration of intangible assets such as human resources, structural and relational resources has been grouped under the umbrella of intellectual capital. This study comprises of a single descriptive case study analysis to ascertain how intellectual capital is managed strategically to gain a competitive advantage in an organisation in the banking and financial services sector in Zambia. Based on document review and semi-structured interviews, this thesis investigated the extent to which an organisation in the banking and financial services sector in Zambia leveraged intellectual capital to gain competitive advantage. In this study it was found that there is a low level appreciation of the intellectual capital phenomenon as a strategic management tool in the participating organisation. However, the organisation has adopted aspects of intellectual capital and has implemented them successfully accounting for the organisation‘s competitive edge in the market.
- Full Text:
- Authors: Banda, Japhet Mathias
- Date: 2011
- Subjects: Intellectual capital -- Management , Intellectual capital -- Zambia , Banks and banking -- Zambia , Financial services industry -- Management -- Zambia
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1178 , http://hdl.handle.net/10962/d1002795 , Intellectual capital -- Management , Intellectual capital -- Zambia , Banks and banking -- Zambia , Financial services industry -- Management -- Zambia
- Description: Fundamental changes in the global economy are changing the basis of organisational competitive advantage. The challenge in attaining a competitive advantage is characterised by factors such as increased competition, market volatility, geographically dispersed operations, customer awareness, raising workforce diversity and stringent regulatory regimes. These factors have driven, and in turn have been driven by, an increasing complexity of products, services and the processes that create value, resulting in changes in the structural and functional dimensions of the organisation. Business executives and academics recognise the shift in value creating assets from the traditional land, labour and capital to intangible assets such as knowledge and information becoming the most important resources an organisation can muster.The combination and integration of intangible assets such as human resources, structural and relational resources has been grouped under the umbrella of intellectual capital. This study comprises of a single descriptive case study analysis to ascertain how intellectual capital is managed strategically to gain a competitive advantage in an organisation in the banking and financial services sector in Zambia. Based on document review and semi-structured interviews, this thesis investigated the extent to which an organisation in the banking and financial services sector in Zambia leveraged intellectual capital to gain competitive advantage. In this study it was found that there is a low level appreciation of the intellectual capital phenomenon as a strategic management tool in the participating organisation. However, the organisation has adopted aspects of intellectual capital and has implemented them successfully accounting for the organisation‘s competitive edge in the market.
- Full Text:
Trophodynamics of the benthic and hyperbenthic communities inhabiting the Sub-Antarctic Prince Edward Islands : stable isotope and fatty acid signatures
- Authors: Allan, Elizabeth Louise
- Date: 2011
- Subjects: Benthos -- Prince Edward Islands Benthos -- Feeding and feeds -- Prince Edward Islands Benthos -- Nutrition -- Prince Edward Islands Prince Edward Islands
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: vital:5806 , http://hdl.handle.net/10962/d1006350
- Description: The aim of this study was to investigate spatial changes in the trophic and energy pathways of the benthic community in the shallow shelf waters of the sub-Antarctic Prince Edward Islands (PEI). A combination of stable isotope and fatty acid analyses were used to provide a time-integrated view of the assimilated feeding history of selected components of the PEI benthic community. This study forms part of the larger project entitled “Variability in the Southern Ocean ecosystems” and is a contribution to the South African National Antarctic Programme (SANAP). During austral autumn 2009, benthic specimens were collected from 10 stations (from depths of 70 to 295 m) in different regions around the PEI: inter-island shelf (upstream, between and downstream of the islands) and nearshore. Historical data were combined with new data collected during 2009 to assess the long-term trends in the feeding ecology of the benthos in the region of the islands. The stable isotope and fatty acid signatures of the benthic suspension- and deposit-feeding organisms generated during this study suggested that these two communities incorporated both phytoplankton and kelp in their diets. Stable isotope, and to a lesser extent fatty acid signatures, indicated that kelp contributed more to the diets of those organisms in close proximity to the kelp beds (nearshore stations) than those from the inter-island region. Overall, however, pelagic phytoplankton was the dominant food source in the diets of all organisms, even for those living near the kelp beds. Notable exceptions were the sponges and bryozoans, in which kelp and phytoplankton contributed similar proportions to their diets, most likely resulting from a size restricted feeding mode. There were, therefore, no distinct spatial differences in the importance of the various food sources. However, fatty acid compositional data indicated increased food quality between and within the lee of the islands compared to upstream. The organisms collected upstream of the PEI had substantially lower quantities of total fatty acids (TFAs) than organisms of the same species collected from nearshore, open shelf or downstream stations. The increased food quality between and within the lee of the islands was likely a result of the “island mass effect”, which reflects increased phytoplankton concentrations at the PEI. The fatty acid profiles of hyperbenthic shrimp Nauticaris marionis, a key species in the PEI ecosystem, revealed no distinct ontogenetic or spatial patterns. This result is in contrast to the stable isotope analyses, which detected both spatial and ontogenetic differences in the diet of the shrimp. Nearshore shrimp were more ₁₃C-enriched than those from the inter-island region, suggesting increased kelp entering the food web within these regions. In addition, the shrimps demonstrated enrichment in δ₁₃C and δ₁₅N signatures with an increase in size, resulting in a relatively distinct separation of size classes, thus reflecting niche separation through their diets. The fatty acid profiles revealed that the shrimp all contained large proportions of polyunsaturated fatty acids (PUFAs) and essential fatty acids (EFAs), indicating that the quality of food consumed was similar among size class and region despite the niche separation and variation in carbon sources utilised. In addition, diatom and dinoflagellate fatty acids (20:5ω3 and 22:6ω3, respectively) occurred in the highest proportions in N. marionis, highlighting the importance of phytoplankton (indirectly) in their diet. These results represent strong evidence that phytoplankton is an importance food source in the PEI ecosystem. The temporal investigation of isotope signatures in the benthos at the PEI indicated that N. marionis demonstrated an overall depletion in δ₁₃C signatures over the period of 1984 to 2009 (nearshore: -2.55 ‰, inter-island: -2.32 ‰). Overall, the benthic community showed similar depletions in δ13C signatures (from -1.96 to -4.70 ‰), suggesting that shifts have occurred in the carbon signatures at the base of the food web. The depletion in δ₁₃C signatures of the benthos at the PEI most likely reflects increased contributions of smaller slow growing phytoplankton cells (more depleted signatures than large fast growing cells) in the diets of these organisms over time. These diet shifts, in turn, suggest a decrease in productivity has occurred at the islands, likely due to a decreased frequency and intensity of the “island mass effect”. Decreased phytoplankton productivity at the PEI likely results from the southward shift in the average position of the sub-Antarctic Front (SAF), most likely in response to climate change, which in turn promotes flow-through conditions rather than retention at the PEI.
- Full Text:
- Authors: Allan, Elizabeth Louise
- Date: 2011
- Subjects: Benthos -- Prince Edward Islands Benthos -- Feeding and feeds -- Prince Edward Islands Benthos -- Nutrition -- Prince Edward Islands Prince Edward Islands
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: vital:5806 , http://hdl.handle.net/10962/d1006350
- Description: The aim of this study was to investigate spatial changes in the trophic and energy pathways of the benthic community in the shallow shelf waters of the sub-Antarctic Prince Edward Islands (PEI). A combination of stable isotope and fatty acid analyses were used to provide a time-integrated view of the assimilated feeding history of selected components of the PEI benthic community. This study forms part of the larger project entitled “Variability in the Southern Ocean ecosystems” and is a contribution to the South African National Antarctic Programme (SANAP). During austral autumn 2009, benthic specimens were collected from 10 stations (from depths of 70 to 295 m) in different regions around the PEI: inter-island shelf (upstream, between and downstream of the islands) and nearshore. Historical data were combined with new data collected during 2009 to assess the long-term trends in the feeding ecology of the benthos in the region of the islands. The stable isotope and fatty acid signatures of the benthic suspension- and deposit-feeding organisms generated during this study suggested that these two communities incorporated both phytoplankton and kelp in their diets. Stable isotope, and to a lesser extent fatty acid signatures, indicated that kelp contributed more to the diets of those organisms in close proximity to the kelp beds (nearshore stations) than those from the inter-island region. Overall, however, pelagic phytoplankton was the dominant food source in the diets of all organisms, even for those living near the kelp beds. Notable exceptions were the sponges and bryozoans, in which kelp and phytoplankton contributed similar proportions to their diets, most likely resulting from a size restricted feeding mode. There were, therefore, no distinct spatial differences in the importance of the various food sources. However, fatty acid compositional data indicated increased food quality between and within the lee of the islands compared to upstream. The organisms collected upstream of the PEI had substantially lower quantities of total fatty acids (TFAs) than organisms of the same species collected from nearshore, open shelf or downstream stations. The increased food quality between and within the lee of the islands was likely a result of the “island mass effect”, which reflects increased phytoplankton concentrations at the PEI. The fatty acid profiles of hyperbenthic shrimp Nauticaris marionis, a key species in the PEI ecosystem, revealed no distinct ontogenetic or spatial patterns. This result is in contrast to the stable isotope analyses, which detected both spatial and ontogenetic differences in the diet of the shrimp. Nearshore shrimp were more ₁₃C-enriched than those from the inter-island region, suggesting increased kelp entering the food web within these regions. In addition, the shrimps demonstrated enrichment in δ₁₃C and δ₁₅N signatures with an increase in size, resulting in a relatively distinct separation of size classes, thus reflecting niche separation through their diets. The fatty acid profiles revealed that the shrimp all contained large proportions of polyunsaturated fatty acids (PUFAs) and essential fatty acids (EFAs), indicating that the quality of food consumed was similar among size class and region despite the niche separation and variation in carbon sources utilised. In addition, diatom and dinoflagellate fatty acids (20:5ω3 and 22:6ω3, respectively) occurred in the highest proportions in N. marionis, highlighting the importance of phytoplankton (indirectly) in their diet. These results represent strong evidence that phytoplankton is an importance food source in the PEI ecosystem. The temporal investigation of isotope signatures in the benthos at the PEI indicated that N. marionis demonstrated an overall depletion in δ₁₃C signatures over the period of 1984 to 2009 (nearshore: -2.55 ‰, inter-island: -2.32 ‰). Overall, the benthic community showed similar depletions in δ13C signatures (from -1.96 to -4.70 ‰), suggesting that shifts have occurred in the carbon signatures at the base of the food web. The depletion in δ₁₃C signatures of the benthos at the PEI most likely reflects increased contributions of smaller slow growing phytoplankton cells (more depleted signatures than large fast growing cells) in the diets of these organisms over time. These diet shifts, in turn, suggest a decrease in productivity has occurred at the islands, likely due to a decreased frequency and intensity of the “island mass effect”. Decreased phytoplankton productivity at the PEI likely results from the southward shift in the average position of the sub-Antarctic Front (SAF), most likely in response to climate change, which in turn promotes flow-through conditions rather than retention at the PEI.
- Full Text:
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