The Impact of Regulation on the Performance of Universal Banks in Ghana

ABSTRACT This research paper studies the impact of banking regulations on the performance of universal banks in Ghana. The study uses OLS regression for panel data to analyze the impact of the banking regulations on profitability and efficiency metrics of six universal banks listed on the Ghana Stock Exchange. The research uses data collected from 2005 to 2017. The first aim of the study is to identify previous regulatory changes and their impact on the performance of the universal banks. The second aim is to forecast the impact of future regulations on universal banks after the recent Ghana banking crisis. The use of capital adequacy ratio as the sole regulation is because of the recent banking crisis that mainly affected universal and commercial banks. The results of the study show that banking regulation has a positive relationship with return on assets, but a negative relationship with operating expense ratio