Investigating the Simultaneous Implementation of the Regulatory Capital and Liquidity Requirements in Iranian Banks
The financial crisis of 2007-2009 led to the redoubled attention of international institutions to the issue of banking regulation. In this regard, the Basel Committee to exercise effective banking supervision reviewed and introduced new standards and requirements in the field of banking regulations,...
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2021-06-01
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| Series: | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
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| Online Access: | https://joer.atu.ac.ir/article_13777_d573d6bbdcec42298271fe5049accd3c.pdf |
| _version_ | 1797375590850887680 |
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| author | Reza Tehrani Mahshid Shahchera Saeid Fallahpour Zeinab Biyabani |
| author_facet | Reza Tehrani Mahshid Shahchera Saeid Fallahpour Zeinab Biyabani |
| author_sort | Reza Tehrani |
| collection | DOAJ |
| description | The financial crisis of 2007-2009 led to the redoubled attention of international institutions to the issue of banking regulation. In this regard, the Basel Committee to exercise effective banking supervision reviewed and introduced new standards and requirements in the field of banking regulations, such as capital adequacy requirements, providing liquidity requirements, and leverage ratio. On the whole, studies show that capital ratios have significant and negative impacts on large European bank-retail-and-other-lending-growth in a context of deleveraging and “credit crunch” in Europe over the post-2008 financial crisis period. Additionally, liquidity indicators have positive but perverse effects on bank-lending growth, which supports the need to consider heterogeneous banks’ characteristics and behaviors when implementing new regulatory policies. In this article, by using the data of the Iranian banks during 2006-2018, the simultaneous effect of the new liquidity and capital regulations, inspired by the requirements of Basel Committee and based on the new instructions of the Central Bank, has been studied. In other words, the issue addressed in this paper is what conditions the simultaneous implementation of capital and liquidity requirements by banks will put them in. According to the results, liquidity requirements and capital requirements are complementary. Based on the results, the relationship between liquidity risk (Inverse of Net Stable Funding Ratio) and capital adequacy is positive. Therefore, with the increase of liquidity risk in banks, it will not be possible to establish capital requirements following the provisions of Basel III. |
| first_indexed | 2024-03-08T19:26:36Z |
| format | Article |
| id | doaj.art-8a3639737eb94cecbe3fa6bf1caa440e |
| institution | Directory Open Access Journal |
| issn | 1735-210X 2476-6453 |
| language | fas |
| last_indexed | 2024-03-08T19:26:36Z |
| publishDate | 2021-06-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| spelling | doaj.art-8a3639737eb94cecbe3fa6bf1caa440e2023-12-26T08:03:25ZfasAllameh Tabataba'i University PressFaslnāmah-i Pizhūhish/Nāmah-i Iqtisādī1735-210X2476-64532021-06-012181457710.22054/joer.2022.58845.94813777Investigating the Simultaneous Implementation of the Regulatory Capital and Liquidity Requirements in Iranian BanksReza Tehrani0Mahshid Shahchera1Saeid Fallahpour2Zeinab Biyabani3Professor, Faculty of Management, University of Tehran, Tehran, IranAssistant Professor, Faculty Member at Monetary and Banking Research InstituteAssistant Professor, Faculty of Management, University of Tehran, Tehran, IranPh.D. Candidate in Finance, University of Tehran, Tehran, IranThe financial crisis of 2007-2009 led to the redoubled attention of international institutions to the issue of banking regulation. In this regard, the Basel Committee to exercise effective banking supervision reviewed and introduced new standards and requirements in the field of banking regulations, such as capital adequacy requirements, providing liquidity requirements, and leverage ratio. On the whole, studies show that capital ratios have significant and negative impacts on large European bank-retail-and-other-lending-growth in a context of deleveraging and “credit crunch” in Europe over the post-2008 financial crisis period. Additionally, liquidity indicators have positive but perverse effects on bank-lending growth, which supports the need to consider heterogeneous banks’ characteristics and behaviors when implementing new regulatory policies. In this article, by using the data of the Iranian banks during 2006-2018, the simultaneous effect of the new liquidity and capital regulations, inspired by the requirements of Basel Committee and based on the new instructions of the Central Bank, has been studied. In other words, the issue addressed in this paper is what conditions the simultaneous implementation of capital and liquidity requirements by banks will put them in. According to the results, liquidity requirements and capital requirements are complementary. Based on the results, the relationship between liquidity risk (Inverse of Net Stable Funding Ratio) and capital adequacy is positive. Therefore, with the increase of liquidity risk in banks, it will not be possible to establish capital requirements following the provisions of Basel III.https://joer.atu.ac.ir/article_13777_d573d6bbdcec42298271fe5049accd3c.pdfliquidity requirementscapital adequacybasel committeebanking supervision |
| spellingShingle | Reza Tehrani Mahshid Shahchera Saeid Fallahpour Zeinab Biyabani Investigating the Simultaneous Implementation of the Regulatory Capital and Liquidity Requirements in Iranian Banks Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī liquidity requirements capital adequacy basel committee banking supervision |
| title | Investigating the Simultaneous Implementation of the Regulatory Capital and Liquidity Requirements in Iranian Banks |
| title_full | Investigating the Simultaneous Implementation of the Regulatory Capital and Liquidity Requirements in Iranian Banks |
| title_fullStr | Investigating the Simultaneous Implementation of the Regulatory Capital and Liquidity Requirements in Iranian Banks |
| title_full_unstemmed | Investigating the Simultaneous Implementation of the Regulatory Capital and Liquidity Requirements in Iranian Banks |
| title_short | Investigating the Simultaneous Implementation of the Regulatory Capital and Liquidity Requirements in Iranian Banks |
| title_sort | investigating the simultaneous implementation of the regulatory capital and liquidity requirements in iranian banks |
| topic | liquidity requirements capital adequacy basel committee banking supervision |
| url | https://joer.atu.ac.ir/article_13777_d573d6bbdcec42298271fe5049accd3c.pdf |
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