Table 2.

Control variables and banking system variables.

Variables	Variable Name & Code	Definition	Units	Source
Banking System Variables
	Restrictions on Banking Activities (RBA)	The level of regulatory restrictions faced by banks, considering factors such as equities markets, insurance, real estate, and ownership of shares in listed commercial banks. The score ranges from 0 to 16, with a higher score indicating more stringent restrictions.	0–16	Bank of Ghana
	Competition Index (BA)	A market power indicator in the banking industry that compares the results of pricing and marginal costs. BC represents the three most considerable assets of universal banks as a share of total universal banking assets.	percentage	Bank of Ghana
	Bank Concentration (BC)	Concentration of assets in the banking system, measured as the share of total assets held by the largest banks.	percentage	Bank of Ghana
Control Variables
	Foreign Dummy (FD)	A dummy variable that takes the value of 1 if 50 % or more shares of the banks belong to foreigners and 0 if not.	Zero/one	Bank of Ghana
Instruments
	State Ownership Dummy (STD)		Zero/one	Bank of Ghana
	Government Indexr (GI)		−2.5 to 2.5	Bank of Ghana
	Private Monitoring Index		0 to 1	Bank of Ghana
	Monetary Independence Index		0 to 1	WDI
	Political Stability Index		−2.5 to 2.5	WDI