Regulation and risk taking in the banking industry: evidence from Tunisia

Belanes, Amel; Hajiba, Afef Ben

doi:10.1504/aajfa.2012.046334

Cited by 5 publications

(12 citation statements)

References 32 publications

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“…Also, the results show the regulatory capital effects on the bank risk taking in the egyptian banks, this result enhanced the second hypothesis, which refers to that increase regualtory capital higher risk taking, which banks engage in more risky activities or encounter any problems. This results consist of many studies like : (Linsmeier, 2011;Francis & Osborne, 2012;Ayaydin & Karakaya , 2014;and Abou-El-Sood, 2016) but this result isnot consistent with a large number of studies claim that there is a statistical significance negative relationship between regualtory capital and bank risk taking (Belanes & Hajiba, 2012;Shim, 2013;and Chiaramonte & Casu, 2016). Capital is not the only reason behind banking fragility but improving the quantity and quality of capital can lead to improving the performance of banks, and this supports the results have proved that banks use cheapest types of capital in order to meet the regulatory standards.…”

Section: Discussionmentioning

confidence: 64%

“…To examine the association between applying international capital requirements and bank risk, Belanes and Hajiba (2012) have shown how the application of international standards of capital requirements in 1999 in Tunisian banks helped them in reducing the default risk which has resulted in banking stability. They also have added that large banks engage in more risk as driven by market.…”

Section: Regulatory Capital and Bank Risk Takingmentioning

confidence: 99%

“…It has also been noted that other factors have an influence on the findings to examine the association between the two variables, such as the size of banks and the regulations applied in different countries. In addition, a large number of studies presented in the above literature claim an indirect association between regulatory capital and bank risk, meaning that there is a statistical significance relationship between the two variables (Belanes & Hajiba, 2012;Shim, 2013;and Chiaramonte & Casu, 2016) thus the second hypothesis will be as follows: H1: there is a significant association between regulatory capital and bank risk taking.…”

Section: Regulatory Capital and Bank Risk Takingmentioning

confidence: 99%

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The Impact of Regulatory Capital and Bank Characteristics on the Relationship between Bank Competition and Risk Taking in the Banking System

Abdel-Wanis

2021

jabminternational

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This paper explores the association between bank competition, regulatory capital, and bank risk taking in an Egyptian setting and to examine the interaction between bank competition and regulatory capital and their impact on bank risk taking in developing countries like Egypt and also investigate the effect of bank characteristics on the relationship between bank competition and bank risk taking through a sample of 27 Egyptian listed banks during the period 2012-2018 using OLS regression . Results indicated that there is a negative impact of bank competition on the bank risk taking and a positive effect of regulatory capital on bank risk taking in the Egyptian listed banks. Results show that increase regulatory play a vertical role in enhance association between competition and bank risk taking and also, there is a positive impact of bank characteristics like: bank size and divarication on bank risk taking in the Egyptian banks. Results refer to there is no effect of bank type, leverage and profitability to support the relationship between bank competition and risk taking

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Section: Discussionmentioning

confidence: 64%

Section: Regulatory Capital and Bank Risk Takingmentioning

confidence: 99%

Section: Regulatory Capital and Bank Risk Takingmentioning

confidence: 99%

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The Impact of Regulatory Capital and Bank Characteristics on the Relationship between Bank Competition and Risk Taking in the Banking System

Abdel-Wanis

2021

jabminternational

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“…Besides, the findings reveal that a larger regulatory capital base is a defensive tool against a bank's default since it covers credit, market, and operational losses (e.g. Belanes and Hajiba, 2012;Berger and Bouwman, 2013;Lee and Hsieh, 2013;Nguyen, 2013;Adesina and Mwamba, 2016;Fratzscher et al, 2016;Laeven et al, 2016).…”

Section: Regulatory Capital and Bank Risk-takingmentioning

confidence: 99%

“…1 These capital regulations absorb banks' losses and enable banks to withstand economic shocks (e.g. Naceur and Kandil, 2009;Belanes and Hajiba, 2012;Adesina and Mwamba, 2016). Nevertheless, some banks that maintained the regulatory capital adequacy ratio collapsed during the financial crisis of 2007(e.g.…”

Section: Introductionmentioning

confidence: 99%

Examining the Association between Bank Competition, Regulatory Capital, and Bank Risk-Taking

Shahin

Sallam

Abou-El-Sood

2021

The Academic Journal of Contemporary Commercial Research

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Using a sample of 27 banks in Egypt covering the period from 2011 till 2017, the results suggest that the banking sector in Egypt is characterized by monopolistic competition. The findings provide empirical evidence that a higher level of competition increases bank risk-taking and contributes to financial fragility in the absence of banking capital regulations. Further, larger regulatory capital adequacy has the potential to discipline the risk-shifting incentives of banks and protect them against default. Finally, the tradeoff between bank competition and financial stability does not indicate that bank regulators shall give up trying to improve it. In fact, the findings prove that it is possible to maintain a larger regulatory capital ratio to ensure effective competition and financial stability at the same time. This represents the main challenge for bank supervisors and regulators. The findings are robust to alternative measures of bank risk-taking.

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Capital requirements, banking supervision and lending behavior: evidence from Tunisia

Guizani

2015

Middle East Development Journal

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This paper represents a contribution to the still meager literature on the impact of prudential regulation bank behavior in Tunisia. It aims to examine the effect of the capital requirements on bank credits during the period from 1999 through 2010 and to assess the effectiveness of the banking supervision policy in containing banking system's risk. For this purpose a dynamic model is built and then an empirical regression is estimated. The results shows that regulatory capital framework has been binding bank lending in Tunisia during the period of study; well-capitalized banks have lent more than less-capitalized ones. Despite the apparent stringency of the bank regulator in Tunisia, banking supervision has been weakly effective in restraining banks' overall risk. Further strengthening of the banking supervision policy is still needed on the part of the central bank of Tunisia; i.e., the bank regulator.

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Regulation and risk taking in the banking industry: evidence from Tunisia

Cited by 5 publications

References 32 publications

The Impact of Regulatory Capital and Bank Characteristics on the Relationship between Bank Competition and Risk Taking in the Banking System

The Impact of Regulatory Capital and Bank Characteristics on the Relationship between Bank Competition and Risk Taking in the Banking System

Examining the Association between Bank Competition, Regulatory Capital, and Bank Risk-Taking

Capital requirements, banking supervision and lending behavior: evidence from Tunisia

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