The Impact of Regulation on Risk Perception: Evidence from the Zimbabwean Banking Industry

Ojiako, Udechukwu; Manungo, Tinashe; Chipulu, Max; Johnson, Johnnie

Abstract

This paper explores the impact of regulations on the perceptions and management of risk. The study focuses on Zimbabwean banks. We evaluated the influence of banking regulatory policy using data gathered from a Regulatory Impact Assessment (RIA) questionnaire and data measuring annual overall output from Zimbabwean banks. We employed a number of statistical models (Binomial, HLogLinear models and time series forecasting) to test various hypotheses concerning the perception of bank employees of the impact of regulation on the management of risk in Zimbabwean banks. We found that: (1) respondents’ perceptions of the impact of regulation on risk management correlated among different risk types in Zimbabwean banks; (2) respondents generally appeared to perceive dollarization and Basel II positively; and (3) respondents were not optimistic about the impact of Reserve Bank of Zimbabwe (RBZ) policy on overall banking efficiency. Overall, we found that due to its near chaotic nature, RBZ regulation policy initiatives had no impact on the performance of banks in Zimbabwe.

Citation

Ojiako, U., Manungo, T., Chipulu, M., & Johnson, J. (2013). The Impact of Regulation on Risk Perception: Evidence from the Zimbabwean Banking Industry. African development review = Revue africaine de développement, 25(3), https://doi.org/10.1111/j.1467-8268.2013.12029.x

• Journal Article Type: Article
• Online Publication Date: Sep 18, 2013
• Publication Date: 2013
• Deposit Date: Sep 28, 2021
• Journal: African Development Review
• Print ISSN: 1017-6772
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 25
• Issue: 3
• DOI: https://doi.org/10.1111/j.1467-8268.2013.12029.x
• Public URL: http://researchrepository.napier.ac.uk/Output/2802495