The Impact of Prudential Regulation on Banks' Capital and Risk-Taking
One of the main components of an effective banking supervision system is its regulatory framework, so that regulatory oversight is not possible without comprehensive regulation. The main purpose of this paper is to assess the simultaneous impact of regulatory prudential regulation on banks' cap...
| Main Authors: | , |
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| Format: | Article |
| Language: | fas |
| Published: |
Iran Banking Institute
2017-11-01
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| Series: | مطالعات مالی و بانکداری اسلامی |
| Subjects: | |
| Online Access: | http://jifb.ibi.ac.ir/article_54990_2c4c2cea5c6ab591c203a06c379dfb77.pdf |
| _version_ | 1818067582521966592 |
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| author | Mohammad Javad Mohagheghnia Yekta Pakniyat |
| author_facet | Mohammad Javad Mohagheghnia Yekta Pakniyat |
| author_sort | Mohammad Javad Mohagheghnia |
| collection | DOAJ |
| description | One of the main components of an effective banking supervision system is its regulatory framework, so that regulatory oversight is not possible without comprehensive regulation. The main purpose of this paper is to assess the simultaneous impact of regulatory prudential regulation on banks' capital and risk-taking behavior using a panel of 20 banks operating in Iran over the period 1385-1394. In this research, it is shown that the prudential regulation increase banks' capital and reduce the risk-taking behavior of banks. Therefore, prudential regulation would increase the banks' prudential behavior by reducing risk and increasing banks' capital, and this also shows that the most of the country's banks have moved in recent years in line with international regulatory frameworks (at least within the Basel I framework). Using simultaneous equations, it is also found out that the bank's profitability does not have a significant relationship with the bank's capitalization level suggesting that Iranian banks do not rely on their domestic resources to build their capital buffer. |
| first_indexed | 2024-12-10T15:25:58Z |
| format | Article |
| id | doaj.art-64a585cfef544be691f94396341142b1 |
| institution | Directory Open Access Journal |
| issn | 2588-3569 2588-4433 |
| language | fas |
| last_indexed | 2024-12-10T15:25:58Z |
| publishDate | 2017-11-01 |
| publisher | Iran Banking Institute |
| record_format | Article |
| series | مطالعات مالی و بانکداری اسلامی |
| spelling | doaj.art-64a585cfef544be691f94396341142b12022-12-22T01:43:33ZfasIran Banking Instituteمطالعات مالی و بانکداری اسلامی2588-35692588-44332017-11-013بهار و تابستان537754990The Impact of Prudential Regulation on Banks' Capital and Risk-TakingMohammad Javad Mohagheghnia0Yekta Pakniyat1Faculty Member, Allameh Tabataba'i UniversityM.A in Islamic BankingOne of the main components of an effective banking supervision system is its regulatory framework, so that regulatory oversight is not possible without comprehensive regulation. The main purpose of this paper is to assess the simultaneous impact of regulatory prudential regulation on banks' capital and risk-taking behavior using a panel of 20 banks operating in Iran over the period 1385-1394. In this research, it is shown that the prudential regulation increase banks' capital and reduce the risk-taking behavior of banks. Therefore, prudential regulation would increase the banks' prudential behavior by reducing risk and increasing banks' capital, and this also shows that the most of the country's banks have moved in recent years in line with international regulatory frameworks (at least within the Basel I framework). Using simultaneous equations, it is also found out that the bank's profitability does not have a significant relationship with the bank's capitalization level suggesting that Iranian banks do not rely on their domestic resources to build their capital buffer.http://jifb.ibi.ac.ir/article_54990_2c4c2cea5c6ab591c203a06c379dfb77.pdfPrudential RegulationBank CapitalCredit risk |
| spellingShingle | Mohammad Javad Mohagheghnia Yekta Pakniyat The Impact of Prudential Regulation on Banks' Capital and Risk-Taking مطالعات مالی و بانکداری اسلامی Prudential Regulation Bank Capital Credit risk |
| title | The Impact of Prudential Regulation on Banks' Capital and Risk-Taking |
| title_full | The Impact of Prudential Regulation on Banks' Capital and Risk-Taking |
| title_fullStr | The Impact of Prudential Regulation on Banks' Capital and Risk-Taking |
| title_full_unstemmed | The Impact of Prudential Regulation on Banks' Capital and Risk-Taking |
| title_short | The Impact of Prudential Regulation on Banks' Capital and Risk-Taking |
| title_sort | impact of prudential regulation on banks capital and risk taking |
| topic | Prudential Regulation Bank Capital Credit risk |
| url | http://jifb.ibi.ac.ir/article_54990_2c4c2cea5c6ab591c203a06c379dfb77.pdf |
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