Threshold effects of climate change on banking system stability—The example of Sub-Saharan Africa
Year: 2025
Type: article
Abstract: The paper assesses the threshold at which climate change impacts banking system stability in selected Sub-Saharan economies by applying the panel threshold regression on data spanning 1996 to 2017. The study found that temperature reported a threshold of −0.7316 ℃. Further, precipitation had a threshold of 7.1646 mm, while the greenhouse gas threshold was 3.6680 GtCO2eq. In addition, the climate change index recorded a threshold of −0.1751%. Overall, a non-linear relationship was established between climate change variables and banking system stability in selected Sub-Saharan economies. The study recommends that central banks and policymakers propagate the importance of climate change uncertainties and their threshold effects to banking sectors to ensure effective and stable banking system operations.
DOI: 10.24294/jipd11482
Authors: Emmanuel Amo-Bediako, Oliver Takawira
Institutions: University of Johannesburg, UniDistance Suisse
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4410350397