Corruption and banking system performance in Algeria

Abstract EN

In this paper we have explored and analyzed the relationship between corruption and banking system performance in Algeria measured by multiple key indicators, and using statistical analysis of time series.

Causality tests have excluded some indicators of banking performance from the study for being independent from corruption.

Statistical analysis have shown that banking profitability measured by return on equity and return on assets slightly influence corruption in the same direction, which means the higher profitability of banks is the higher is corruption.

Also, corruption influences banking performance in a negative way, the higher corruption is the lower is the performance, mainly real interest rate of banks and liquid assets to deposits.