Felix Kwabena Danso

Cross-country difference-in-differences designs are widely used to evaluate banking reforms. In post-crisis Europe, such designs can attribute region-wide mean reversion in non-performing loans (NPLs) to whichever reform the treated jurisdictions adopted. Reforming systems entered with larger NPL stocks than the few available comparators, many near the floor of the NPL distribution. Across 37 countries from 2008–2025, heterogeneity-robust estimates show that the choice of comparison group determines the estimated effect of the Single Supervisory Mechanism (SSM) on banking-system NPL ratios. The SSM appears to reduce NPL ratios by 3.7 percentage points relative to low-NPL advanced economies, but not relative to non-euro EU members with similar pre-reform asset quality. The estimate rises by 1.1 percentage points for each 1-percentage-point increase in the comparator’s pre-reform NPL ratio. A fictitious reform assigned to non-euro EU members outside the SSM produces an apparent reduction of 8.0 percentage points that survives randomisation inference, and reassigning SSM membership at random among systems with similar pre-reform NPL ratios yields apparent reductions of 2.8–5.2 percentage points against low-NPL economies in 95% of draws. Open-banking mandates reproduce the pattern: an estimate that survives robustness checks fails bounded parallel-trend analysis, passes randomisation inference only in studentised form, and is reproduced in levels by fictitious pre-mandate dates. Randomisation confidence sets cannot exclude effects approaching the size of the pre-reform NPL stock, except against level-matched comparators that include Hungary and Romania. We propose a four-step audit, comprising comparison-group gradients, fictitious reforms, inverted randomisation tests and bounds on parallel-trend violations, for evaluating banking reforms across jurisdictions.

We examine whether annual deterioration in multidimensional climate vulnerability is associated with banking-system stability in emerging market and developing economies. Using 1,480 country-year observations from 95 countries over 2004–2021, we measure vulnerability dynamics by annual changes in the ND-GAIN vulnerability index and banking stability as measured by the country-level Z-score. Our preferred two-way fixed-effects specification controls for macroeconomic conditions and common annual shocks, with standard errors clustered at the country level. Annual vulnerability deterioration is associated with significantly lower banking-system stability. A one-within-country-standard-deviation deterioration corresponds to an estimated 0.22-point decline in the Z-score, approximately 8% of the within-country standard deviation of banking stability. The negative association remains evident under first-difference estimation, country-specific linear trends, alternative covariance estimators, sample restrictions, future-change placebo tests, and country- and year-influence diagnostics. Supplementary analyses provide limited evidence that the aggregate association is reflected in banking-system profitability and indicate that the vulnerability–stability slope varies with the development of climate-related financial policy. Given the observational design and the endogenous adoption of policies, these extensions do not identify causal mechanisms of transmission or policy effects. By distinguishing annual vulnerability dynamics from persistent vulnerability levels, acute physical events, and transition-risk exposures, the findings identify changes in multidimensional national vulnerability as a distinct source of within-country information about banking-system stability.

Mobile connectivity is widely viewed as a gateway to digital financial inclusion, yet device ownership does not ensure account participation. We define the connectivity-inclusion wedge as the share of adults who personally own a mobile phone but hold neither a financial institution account nor a mobile-money account. Using Global Findex 2025 microdata covering 144,090 adults across 140 economies, we distinguish mobile access from conversion to formal account ownership. The wedge averages 21.6% across economies, represents 15.2% of the covered adult population, and corresponds to approximately 873 million adults. Demographic inequalities operate through both margins: education produces the largest disparity, while youth disadvantage is concentrated particularly strongly in conversion. Weighted Oaxaca-Blinder decompositions with economy fixed effects attribute 63.0% of the gender gap to observed characteristics, but only 7.0% of the substantially larger youth gap. Insufficient funds and service costs are the most frequently reported barriers among connected-but-excluded adults covered by the relevant survey module. Account ownership is associated with greater reported exposure to scams and stronger security practices. In contrast, operational fast-payment systems and regulatory quality are associated with lower account non-ownership among phone owners. These relationships are descriptive rather than causal. The findings establish connectivity as an enabling input rather than a sufficient condition for digital financial participation. Realising the inclusion value of mobile access requires affordable services, accessible onboarding, interoperable payments, digital capability, and enforceable consumer protection.

This paper investigates whether, and through which channels, sovereign indebtedness erodes bank stability in emerging market economies. Using a panel of 60 countries over 2000–2022, we distinguish credit-quality transmission, measured by non-performing loans, from capital-resilience transmission, measured by the bank leverage ratio. A diagnostic-first strategy that applies slope heterogeneity, cross-sectional dependence, unit root, and cointegration tests before estimation reveals a fundamental asymmetry between the two channels. Sovereign debt does not exhibit a stable long-run relationship with non-performing loans; the widely reported levels-based association reflects global co-movement rather than domestic fiscal transmission, and the diagnostically validated short-run elasticity is 42 per cent smaller than conventional estimates. By contrast, sovereign debt and bank leverage share a stable long-run equilibrium, with 36.2 per cent of deviations corrected annually, consistent with a gradual balance-sheet mechanism through which sovereign exposure erodes capital buffers. Global volatility moderates the two channels at different temporal horizons, absorbing explanatory weight in the NPL equation within-period while steepening the adverse long-run capital equilibrium, rather than acting as a uniform amplifier. The capital channel is non-linear beyond a debt threshold of 61.7 per cent of GDP. Regional heterogeneity decomposes into measurable institutional vulnerabilities and a residual region-specific component. These findings imply that sovereign risk should be incorporated into bank capital surveillance frameworks alongside, rather than in place of, NPL monitoring.

We examine the effects of acute physical risk, chronic physical risk, and transition risk on bank stability and lending behaviour across 35 emerging market economies (EMEs) over 2000–2023, providing the first systematic cross-country panel study of the climate risk–banking nexus for the broader EME universe. Employing two-way fixed effects estimation with Driscoll-Kraay standard errors, we generate five principal findings. First, acute physical risk significantly destabilises upper-middle-income EME banking systems (β = -0.021, p < 0.05) but is insignificant in the full sample, reflecting income-differentiated transmission through financial integration and credit chain complexity. Second, transition risk operates as a short-run stability buffer in carbon-intensive EMEs (β = 7.101, p < 0.05, excluding crisis years), attenuated by stronger regulatory quality (β = -5.975, p < 0.01), consistent with the climate Minsky moment framework. Third, the CRFPI × transition risk interaction (β = 53.404, p < 0.001) provides the first cross-country panel evidence that comprehensive climate financial policy frameworks generate direct, large stability benefits for EME banking sectors. Fourth, governance quality fully mediates the climate risk–stability relationship in Africa and the MENA region (β = 9.498, p < 0.001), while regulatory quality is the dominant driver in lower-middle-income EMEs (β = 1.154, p < 0.05), confirming that institutional capacity is the primary resilience determinant in shallower financial systems. Fifth, the transition risk coefficient reverses sign from strongly positive in low-CRFPI countries (β = +6.978, p < 0.001) to significantly negative in high-CRFPI countries (β = -30.617, p < 0.01), confirming that policy-active banking systems have already internalised transition risk as a financial liability. These findings imply that differentiated climate financial regulation, calibrated to income group, institutional capacity, and carbon intensity, is essential for building climate-resilient banking systems across the heterogeneous EME universe.

Our study delved into an analysis of 128 public companies in Ghana, Kenya, and Nigeria to explore the influence of diversified board expertise on firm performance. We also investigated the impact of firm size and age on this relationship. Our results indicate that a varied blend of professional experts on corporate boards significantly boosts a company's ROA, although there is no significant effect when Tobin's Q measures firm performance. Nevertheless, we discovered that combining firm size and age negatively impacts the correlation between board expertise diversity and firm performance. Our findings support the significance of integrating agency, resource dependence, and convergence theories, implying that businesses can improve their financial performance by including an appropriate mix of expertise on their boards, especially for relatively younger small-sized firms. In contrast, more prominent and ageing firms may not see the same financial benefits. Consequently, we recommend that corporate executives and practitioners consider implementing board expertise diversity to enhance their firms' financial performance.