The Relationship between Capital and Bank Risk: Evidence from Tunisia

Moussa, Mohamed Aymen Ben

doi:10.5539/ijef.v7n4p223

Cited by 4 publications

(6 citation statements)

References 22 publications

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“…This result indicated the ineffective use of available assets to generate profit due to an increase in stringent capital requirements. All the models show that there is a negative relationship between bank size (SIZE) and profitability significant with NIP (at 10%), and ROA (at 1%) this result is supported by Moussa (2015) and Rizqi and Faisal (2017). Yousuf and Felföldi (2018) found that bank capital adequacy ratio in Syria affects profitability negatively as expressed by ROE they found that stricter capital requirements means better insurance for depositors, however, this leads to a decrease in the rate of return to shareholders.…”

Section: Regression Analysismentioning

confidence: 67%

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Consequences of Basel Accords on Bank Risk-Taking and Profitability: Evidence from Asian Countries

Gabr

ElBannan

2018

Asian Economic and Financial Review

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The main purpose of this paper is to examine the impact of Basel Accord II on bank profitability and risk-taking in three developing Asian countries; Philippines, Thailand and India over the period 2006-2015. Using panel data, the study methodology is to employ both One-way Analysis of Variance (ANOVA) and multiple regression techniques to explore these relationships. Our empirical results show that Basel II, represented by its three pillars; capital regulatory requirement, official supervisory power and private monitoring and market discipline indices all have a significant negative impact on profitability, which may imply that binding regulations have adverse impacts. Furthermore, capital regulatory requirement and private monitoring inversely impact risk-taking while official supervisory power shows a significantly positive effect on bank risk-taking levels. Concluding that bank regulators must insure that the banks in the three countries strengthen their corporate governance and private monitoring to reduce corruption and enhance performance. Same results are obtained when conducting additional analyses to ensure the validity of the results. Contribution/ Originality:This study contributes in the existing literature by empirically examining the impact of Basel II pillars on bank profitability and risk-taking in lower-middle income Asian countries. The focus was on banks in three countries pooled over 10 years. Employing multivariate regression models aided in directly comparing results with previous studies. INTRODUCTIONBanks are perceived to be a major financial intermediary worldwide. They represent the largest and oldest financial institutions today; channelling depositors" savings into investments (Myerson, 2014). The Basel Committee on Banking Supervision established by the Bank for International Settlements (BIS) was formed to harmonize banking regulation, promoting supervision and financial banking stability. As of July 1988, the Basel Committee consisting of eleven members agreed on the International Convergence of Capital Measurements and

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Section: Regression Analysismentioning

confidence: 67%

“…);Agoraki et al (2011);Thangavelu and Findlay (2011);Alam (2012);Lee and Hsieh (2013);Manlagnit (2015);Maraghni and Rajhi (2015);Moussa (2015);Mohammed and Wetere (2016);Yousuf and Felföldi (2018).…”

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confidence: 99%

Consequences of Basel Accords on Bank Risk-Taking and Profitability: Evidence from Asian Countries

Gabr

ElBannan

2018

Asian Economic and Financial Review

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“…In addition, banks are required to have a sufficient amount of capital, both to support its business expansion as well as a buffer to prevent an to absorb any unexpected losses (Raharjo et al, 2014). Bank uses capital to finance investments and decrease the likelihood of bankruptcy (Moussa, 2015) as well as to compete in global markets (Fitrianto et al, 2006). In line with this, Bank Indonesia, through Bank Indonesia Regulation No.…”

Section: Introductionmentioning

confidence: 99%

Capital adequacy of the banking industry in Indonesia

Murtiyanti

Achsani

Hakim

2015

ejem

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This study analyzes the relationship between credit risk and profitability on the capital adequacy ratio (CAR) of commercial banks in Indonesia. The empirical model result shows that credit risk and profitability performance altogether significantly influence the capital adequacy ratio (CAR). Partially, the variables that significantly influence the CAR are the characteristics and complexity of the bank group. This study also suggests that the pace towards the long-term balance is, in general, less than one year. Capital ratio in the banking industry is 8%, indicating the bank has set aside to anticipate the impact of external factors as well as to comply with Bank Indonesia Regulation Number 15/12/PBI/2013.

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“…Research fromAbusharbeh et al (2013) states that liquidity has a positive difference on CAR. Research byMoussa (2015) states that Size, (CAP), Loan to assets (TLA), ROE and deposit to total assets have a negative difference on CAR while ROA, Capital in credit Operation (CFC) , Operating Expenses to Total Assets (CEA) and inflation rate have no effect on CAR. Nuryati and Anggono (2014) produced research that BOPO, ROE and NIM had Several previous studies on CAR have been led byBatani et al (2014),Mouss (2018), andDreca (2013).…”

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confidence: 99%

Determinants of capital adequacy ratio bank in Indonesia

Marlina

2023

JBFEM

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Banking as a delegate establishment assumes a significant part in the economy and performs well and is sounds. The Capital Adequacy Ratio (CAR) is a measure of how important capital is to banking. OJK has set a new classification for banks based on their core capital. The objective of this research is to ascertain the factors that influence the Capital Adequacy Ratio (CAR) of Indonesian stock exchange-listed banks. The multiple linear regression approach is utilized in this study. The Capital Adequacy Ratio (CAR) is the dependent variable, and the Return on Assets, Loan-to-Deposit Ratio, Net Interest Margin, Operating Expenses, and Operating Income are the independent variables. In view of the exploration results, there is a huge impact of Return On Resources (ROA), Net Interest Edge (NIM), Working Expenses of Working Pay (BOPO), and Credit to Store Proportion (LDR) on the Capital Sufficiency Proportion.

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The Relationship between Capital and Bank Risk: Evidence from Tunisia

Cited by 4 publications

References 22 publications

Consequences of Basel Accords on Bank Risk-Taking and Profitability: Evidence from Asian Countries

Consequences of Basel Accords on Bank Risk-Taking and Profitability: Evidence from Asian Countries

Capital adequacy of the banking industry in Indonesia

Determinants of capital adequacy ratio bank in Indonesia

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