IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 2 NO. 3 2016

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The Impact of the political instability on Conventional Banks’ stability: Evidence in Tunisia

Riadh Brini and Hatem Jemmali

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Abstract

Using the GARCH, E-GARCH models, this paper analyzes the financial stability of a sample of nine Tunisian commercial banks listed in Tunisian Stock Exchange market (BVMT) pre and post the Jasmine revolution, using the daily returns for the period from 02/01/2009 to 29/06/2012. To evaluate the effects of this recent political crisis, we disjointedly consider the pre-crisis period, 2009-2010, the post crisis period, 2011-2012, and the whole period. Before performing the empirical investigation a set of required tests were applied such as the normality, unit root and Heteroskedasticity tests. The results showed that the Tunisian banking system were more stable before the fall of Ben Ali regime, which may due to the strong links with the political stability. The study recommended that banking system in Tunisia need some reforms to diversify their risks and to improve transparency in according loans.

keywords:

Conventional Banks, Financial Stability, BVMT, Jasmine revolution, GARCH Models.

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