Monetary authorities around the world are implementing enhanced banking capital adequacy requirements under Basel III meant to improve financial stability. Critics however argue that increased capital requirements concentrate the banking industry reducing competition while not guaranteeing...

This paper assesses the role that bank segmentation plays in the efficiency of the interbank market and the extent to which segmentation and inefficiency of the interbank market impedes the effectiveness of monetary policy. Using a unique (not public) Kenyan daily dataset for the period June...