Are Banks Really Lazy? Evidence from Middle East and North Africa

This paper investigates whether loan-to-deposit (LTD) ratios and high levels of reserve balances at the central bank (or holding of government securities) are a reflection of policy-driven factors compared to commonly cited reasons of reluctance to lend or sometimes weak investment demand in uncertain environments. The authors examine central bank (CB) balance sheet structures as well as commercial banks’ flow of funds over the period 2007 – 2012.