Macroeconomic Shocks and Banking Sector Developments in Egypt

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dc.creatorYoussef, Hoda
dc.creatorHerrera, Santiago
dc.date2013-01-28T22:31:12Z
dc.date2013-01-28T22:31:12Z
dc.date2013-01
dc.date.accessioned2026-07-01T00:59:51Z
dc.descriptionFrom 2008 to 2011, Egypt was hit by significant shocks, both global and country-specific. This paper assesses the impact of the resulting macroeconomic instability on the banking sector, and examines its role as a shock absorber. The Central Bank of Egypt accommodated the shocks by supplying liquidity to the market. The paper verifies a change in the fiscal regime from one in which the primary fiscal balance was used an instrument to stabilize the public debt ratio to one in which the policy instrument stopped playing that role and affected investors' assessment of the risk of holding public debt. This pattern suggests that fiscal conditions influenced exchange rate and price expectations originating a fiscal dominance situation in which the Central Bank could not control inflation. Hence, the Central Bank lacked functional independence in spite of its de jure independence, which underscores the importance of strengthening institutions that facilitate policy coordination and allow policy to be more predictable. The government also funds itself through non-market mechanisms, in a typical financial repression scheme. The paper estimates the revenue from financial repression at about 2.5 percent of gross domestic product in 2011, which together with the revenues from seignoriage add up to close to 50 percent of the budgeted tax revenues, indicating the need for an in-depth review of the governance of the public banks and the funding of public sector activities. Finally, the paper estimates the impact of shocks to macroeconomic variables on loan portfolio quality and bank capital.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/2013/01/17172327/macroeconomic-shocks-banking-sector-developments-egypt-macroeconomic-shocks-banking-sector-developments-egypt
dc.identifierhttps://hdl.handle.net/10986/12179
dc.identifierhttps://doi.org/10.1596/1813-9450-6314
dc.identifier.urihttp://hdl.handle.net/123456789/414023
dc.languageEnglish
dc.languageen_US
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper; No. 6314
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo/
dc.rightsWorld Bank
dc.subjectADMINISTRATIVE CONTROL
dc.subjectADMINISTRATIVE CONTROLS
dc.subjectAGRICULTURAL CREDIT
dc.subjectALTERNATIVE FUNDING
dc.subjectASSET PRICES
dc.subjectBALANCE OF PAYMENTS
dc.subjectBALANCE OF PAYMENTS CRISIS
dc.subjectBALANCE SHEET
dc.subjectBALANCE SHEETS
dc.subjectBANK BRANCHES
dc.subjectBANK DEPOSIT
dc.subjectBANK DEPOSITS
dc.subjectBANK INTERMEDIATION
dc.subjectBANK LENDING
dc.subjectBANK LOAN
dc.subjectBANK PROFITABILITY
dc.subjectBANKING LAW
dc.subjectBANKING SECTOR
dc.subjectBANKING SECTOR DEVELOPMENTS
dc.subjectBANKING SYSTEM
dc.subjectBIDS
dc.subjectBONDS
dc.subjectBORROWING COSTS
dc.subjectBUDGET CONSTRAINT
dc.subjectBUDGET DEFICIT
dc.subjectCAPITAL ACCOUNT
dc.subjectCAPITAL ADEQUACY
dc.subjectCAPITAL BASE
dc.subjectCAPITAL FLOW
dc.subjectCAPITAL FLOWS
dc.subjectCAPITAL GAINS
dc.subjectCAPITAL INFLOW
dc.subjectCAPITAL INFLOWS
dc.subjectCAPITAL OUTFLOW
dc.subjectCAPITAL OUTFLOWS
dc.subjectCAPITAL REQUIREMENT
dc.subjectCAPITALIZATION
dc.subjectCASH FLOW
dc.subjectCASH HOLDING
dc.subjectCASH HOLDINGS
dc.subjectCENTRAL BANK
dc.subjectCERTIFICATES OF DEPOSIT
dc.subjectCHECKS
dc.subjectCOMMERCIAL BANK
dc.subjectCOMMERCIAL BANK CREDIT
dc.subjectCOMMERCIAL BANKS
dc.subjectCOMPETITIVE MARKETS
dc.subjectCREDIBILITY
dc.subjectCREDIT AVAILABILITY
dc.subjectCREDIT EXPANSION
dc.subjectCREDIT GROWTH
dc.subjectCREDIT RISK
dc.subjectDEBT ISSUER
dc.subjectDEBT LEVEL
dc.subjectDEBT LEVELS
dc.subjectDEBT RATIO
dc.subjectDEBT SERVICE
dc.subjectDEBTORS
dc.subjectDEBTS
dc.subjectDEFICITS
dc.subjectDEMAND FOR CREDIT
dc.subjectDEPOSIT
dc.subjectDEPOSITS
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPMENT BONDS
dc.subjectDOMESTIC BANKS
dc.subjectDOMESTIC CAPITAL
dc.subjectDOMESTIC CAPITAL MARKETS
dc.subjectDOMESTIC CURRENCY
dc.subjectDOMESTIC DEBT
dc.subjectDUMMY VARIABLE
dc.subjectEMERGING ECONOMIES
dc.subjectEXCHANGE RATE
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL DEVELOPMENT
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL LIBERALIZATION
dc.subjectFINANCIAL MARKET
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL SECTOR DEVELOPMENTS
dc.subjectFINANCIAL SYSTEM
dc.subjectFISCAL DEFICIT
dc.subjectFISCAL POLICY
dc.subjectFIXED EXCHANGE RATE
dc.subjectFOREIGN BANK
dc.subjectFOREIGN CURRENCY
dc.subjectFOREIGN INVESTORS
dc.subjectFUTURE CREDIT
dc.subjectGLOBAL CAPITAL
dc.subjectGLOBAL CAPITAL MARKETS
dc.subjectGOVERNMENT ACCOUNTS
dc.subjectGOVERNMENT BONDS
dc.subjectGOVERNMENT BORROWING
dc.subjectGOVERNMENT BUDGET
dc.subjectGOVERNMENT DEBT
dc.subjectGOVERNMENT EXPENDITURES
dc.subjectGOVERNMENT PAPER
dc.subjectGOVERNMENT REVENUES
dc.subjectGOVERNMENT SAVINGS
dc.subjectGOVERNMENT SECURITIES
dc.subjectGOVERNMENT SPENDING
dc.subjectGROSS DOMESTIC PRODUCT
dc.subjectHOLDING
dc.subjectHOLDINGS
dc.subjectHOLDINGS OF GOVERNMENT SECURITIES
dc.subjectIMPLICIT TAX
dc.subjectIMPLICIT TAXES
dc.subjectINCOME TAX
dc.subjectINFLATION
dc.subjectINFLATION RATE
dc.subjectINFORMATION TECHNOLOGY
dc.subjectINSTRUMENT
dc.subjectINSURANCE
dc.subjectINSURANCE COMPANIES
dc.subjectINTEREST COSTS
dc.subjectINTEREST PAYMENTS
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL CAPITAL
dc.subjectINTERNATIONAL CAPITAL MARKETS
dc.subjectINTERNATIONAL STANDARDS
dc.subjectINVESTMENT BANK
dc.subjectINVESTMENT IN GOVERNMENT SECURITIES
dc.subjectINVESTMENTS IN GOVERNMENT SECURITIES
dc.subjectISSUANCE
dc.subjectJUDICIAL SYSTEM
dc.subjectLABOR MARKET
dc.subjectLEGAL FRAMEWORKS
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY CRISES
dc.subjectLOAN
dc.subjectLOAN PORTFOLIO
dc.subjectLOAN QUALITY
dc.subjectLOANABLE FUNDS
dc.subjectLOCAL CURRENCY
dc.subjectLOCAL INVESTORS
dc.subjectLONG-TERM LOANS
dc.subjectMACROECONOMIC ENVIRONMENT
dc.subjectMACROECONOMIC INSTABILITY
dc.subjectMACROECONOMIC VARIABLES
dc.subjectMARKET BORROWING
dc.subjectMARKET FOR CREDIT
dc.subjectMARKET MECHANISMS
dc.subjectMARKET YIELDS
dc.subjectMATURITY
dc.subjectMATURITY STRUCTURE
dc.subjectMINIMUM CAPITAL REQUIREMENTS
dc.subjectMONETARY POLICY
dc.subjectMONEY MARKET
dc.subjectMONEY SUPPLY
dc.subjectMUTUAL FUNDS
dc.subjectNATIONAL INVESTMENT
dc.subjectNON-PERFORMING LOANS
dc.subjectNONPERFORMING LOANS
dc.subjectNPL
dc.subjectOIL PRICES
dc.subjectOPEN ECONOMY
dc.subjectOPEN MARKET
dc.subjectOUTSTANDING DEBT
dc.subjectOWNERSHIP STRUCTURE
dc.subjectPOLITICAL UNCERTAINTY
dc.subjectPORTFOLIO QUALITY
dc.subjectPOST OFFICE
dc.subjectPOST OFFICE SAVINGS
dc.subjectPRICE CHANGES
dc.subjectPRICE STABILITY
dc.subjectPRIVATE BANKS
dc.subjectPRIVATE CREDIT
dc.subjectPRIVATE SECTOR CREDIT
dc.subjectPROBABILITY OF DEFAULT
dc.subjectPRODUCTIVE INVESTMENT
dc.subjectPRODUCTIVE INVESTMENTS
dc.subjectPRUDENTIAL REGULATIONS
dc.subjectPUBLIC BANK
dc.subjectPUBLIC BANKS
dc.subjectPUBLIC BUDGET
dc.subjectPUBLIC DEBT
dc.subjectPUBLIC DEBT HOLDINGS
dc.subjectPUBLIC FINANCE
dc.subjectPUBLIC FINANCES
dc.subjectPUBLIC INVESTMENT
dc.subjectPUBLIC SPENDING
dc.subjectREAL INTEREST
dc.subjectREAL INTEREST RATES
dc.subjectREGULATORY FRAMEWORK
dc.subjectREPO
dc.subjectREPO FACILITY
dc.subjectRESERVE
dc.subjectRESERVE REQUIREMENTS
dc.subjectRESERVES
dc.subjectRETURN
dc.subjectRETURNS
dc.subjectRISK MANAGEMENT
dc.subjectRISK OF DEFAULT
dc.subjectSAVINGS ACCOUNTS
dc.subjectSAVINGS DEPOSITS
dc.subjectSAVINGS INSTRUMENTS
dc.subjectSETTLEMENT
dc.subjectSOCIAL CAPITAL
dc.subjectSOCIAL INSURANCE FUND
dc.subjectSOLVENCY
dc.subjectSOVEREIGN ENTITIES
dc.subjectSTATE BANKS
dc.subjectSTOCK MARKET
dc.subjectSTOCK MARKET INDEX
dc.subjectSTRATEGIC INVESTOR
dc.subjectSUB-NATIONAL ENTITIES
dc.subjectSUPPLY OF CREDIT
dc.subjectT-BILL
dc.subjectT-BILL MARKET
dc.subjectT-BILL RATE
dc.subjectT-BILL RATES
dc.subjectT-BILLS
dc.subjectTAX
dc.subjectTAX RATE
dc.subjectTAX RATES
dc.subjectTAX SYSTEM
dc.subjectTRADE LIBERALIZATION
dc.subjectTRANSACTION
dc.subjectTRANSPARENCY
dc.titleMacroeconomic Shocks and Banking Sector Developments in Egypt

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