Investments

Current Issues in Banking - Domestic and Global.

Submitted to

Dr. Martin Oluba

SMC University

NORMAN NAAMAN AMBUNYA

27 July 2010

Introduction
juvenile decades have witnessed remarkable changes in the banking industry around the world. superiorer(prenominal) penetration, consolidation and international desegregation have changed the banking industry structure. many a(prenominal) aspects of this process have important implications for the way the central banks follow out their work, particularly as regards ensuring financial system stability.

Main trends in the Banking Industry
The Kenyan banking industry experienced three important changes in the 1990s: (i) strong growth and an increase in cogency; (ii) market consolidation and higher concentration; and (iii) international integration and an increase of foreign ownership.

Penetration and efficiency
Penetration and efficiency are two features of the recent development of the Kenyan banking industry. Penetration, measured by loans and deposits as a percentage of gross domestic product, is far more good in Kenya than in any other country in East Africa. Banking loans amounted to 70% of GDP and total deposits to 61% of GDP in 2009. These figures compare with 54% and 47%, respectively, in 1995.



However, genuine take aims of financial intermediation in Kenya, while relatively high in the region are still low by global standards. A related tendency is the increase in efficiency. Operating efficiency, measured as the percentage of expenses against gross stakes margin, improved from 61% in 1999 to 58% in 2009, whereas gross interest margin went from 5.4% to 3.6% in the same period. Banks are thusly functioning with high penetration and at an increasing level of operating efficiency relative to their asset bases. These trends are the essence of a long and stable period of economic involution and sustained economic stability, which forced banks to be disciplined. Significant friendship of foreign banks in the domestic market has also enhanced...If you ask to get a full essay, order it on our website: Ordercustompaper.com



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