316 Int. J. Monetary Economics and Finance, Vol. Copyright © 2010 Inderscience Enterprises Ltd. Bank supervision and bank profitability: the case of MENA countries Faouzi Abdennour Faculty of Economic Science and Management of Nabeul, Department of Economics, Campus Elmerezga 8000, Nabeul, Tunisia Fax: 216 72232318 E-mail: abdennour.faouzi@gmail.com Karim Ben Khediri* CEROS, University Paris Ouest Nanterre La Défense, France and Faculty of Economic Science and Management of Nabeul, Department of Finance, Campus Elmerezga 8000, Nabeul, Tunisia Fax: 216 72232318 E-mail: benkhedirikarim@yahoo.com *Corresponding author Abstract: Using a panel of Middle East and North Africa (MENA) banks, we examine the effect of bank supervision on bank profitability in the 1999–2006 period. We find that supervision differences matter. Bank profitability tends to be higher in countries in which supervisors can take legal action against external auditors for negligence, in which the central bank is responsive for supervision. On the contrary, bank profitability is negatively related to the unification of financial supervision and the existence of Deposit Insurance (DI). Also, several bank characteristics and macroeconomic factors are significantly related to bank profitability. Keywords: bank; MENA; profitability; regulation; scope; structure of supervision; independence of supervision. Reference to this paper should be made as follows: Abdennour, F. and Ben Khediri, K. (2010) ‘Bank supervision and bank profitability: the case of MENA countries’, Int. J. Monetary Economics and Finance, Vol. Biographical notes: Faouzi Abdennour is an Assistant Professor of Economics at the Faculty of Economic Science and Management of Nabeul. He received his PhD in Economics from the Faculty of Economic Science and Management of Tunis. His main interests include financial and monetary economics, bank regulation and supervision.