Financial Liberalization and Banking System Development: Evidence from Arab Countries

Abstract

Financial liberalization is a process that could be profitable for growth but it may pose serious problems to the development and economic prosperity. The objective of this paper thesis is to evaluate by using panel data, the effect of financial liberalization and institutional quality on banking development on a sample of 17 Arab countries over the period 1990-2012. The empirical findings suggest that financial liberalization could have a positive effect as well as the institutional quality on banking development for the Arab region.