Risk-based capital adequacy in assessing on insolvency-risk and financial performances in Taiwan's banking industry

Lin, Shu Ling; Penm, Jack Hw; Gong, Shang-Chi; Chang, Ching-Shan

doi:10.1016/j.ribaf.2004.10.006

Cited by 58 publications

(69 citation statements)

References 19 publications

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“…24 See, for example, Levine (2009), Maechler et al (2007), Lin et al(2005), De Nicolo (2000), Altman and Saunders (1998). Since the z-score is highly skewed, I use the natural logarithm of the z-score in the analysis.…”

Section: ‫ݖ‬ ൌ ‫ܣܱܴ‬ ‫ܴܣܥ‬ ߪሺܴܱ‫ܣ‬ሻmentioning

confidence: 99%

The disciplinary effect of subordinated debt on bank risk taking

Nguyen

2013

Journal of Empirical Finance

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Section: ‫ݖ‬ ൌ ‫ܣܱܴ‬ ‫ܴܣܥ‬ ߪሺܴܱ‫ܣ‬ሻmentioning

confidence: 99%

The disciplinary effect of subordinated debt on bank risk taking

Nguyen

2013

Journal of Empirical Finance

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“…Mixed findings justify the association between the capital adequacy ratio (CAR) and bank risk (NPLR). Several authors (Rime, 2001;Lin et al, 2005;Altunbas et al, 2007;Leaven and Levine, 2009) revealed that regulatory capital (CAR) is positively associated with bank risk. In contrast, others found an inverse relationship between regulatory capital and bank risk (Ho and Hsu, 2010;Agoraki et al, 2011;Lee and Chih, 2013).…”

Section: Capital Adequacy Ratiomentioning

confidence: 99%

Bank Disclosures and their Impact on Credit Risk: Evidence from Bangladesh

Zheng

Sarker

Nahar

2017

Asian Economic and Financial Review

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Article History JEL ClassificationC12; C23; G21; G32.The only way to ensure a well-informed response to bank risks is by ensuring transparent disclosures that flourish with potential synergy. This study investigates the impact of bank disclosures on credit risk where panel data are used. PCSE and FGLS regression models are applied to a sample of 32 commercial banks in Bangladesh from 2010 to 2014. The results reveal that bank disclosures index, non-sponsor ownership and advances to total assets are inversely associated with bank risk, whereas government ownership, capital adequacy ratio and tier 1 capital have a positive effect. The study's findings have a twofold implication for the national economy. First, the higher number of disclosures portrays a transparent image in users' minds that decreases stock volatility and the cost of capital. Second, policy makers should rethink government ownership with respect to the absorption of serious risk. Therefore, it is highly recommended either to denationalize or to reduce government ownership. Contribution/ Originality:This study is one of very few studies which have investigated the relationship between bank disclosures and credit risk in the developing country context. It found that bank credit policies are tremendously affected by the government ownership. Thus, this paper will contribute to the research related to credit risk management.

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“…But the empirical results show both positive and negative impacts of regulatory capital on risk. Some studies found positive impact of capital on risk (Altunbas, Carbo, Gardener, & Molyneux, 2007;Blum, 1999;Kahane, 1977;Kim & Santomero, 1988;Koehn & Santomero, 1980;Laeven & Levine, 2009;Lin, Penm, Gong, & Chang, 2005;Rime, 2001;Shrieves & Dahl, 1992). On the contrary, some other studies found negative impact of capital on risk (Agoraki, Delis, & Pasiouras, 2011;Ho & Hsu, 2010;Jacques & Nigro, 1997;Lee & Chih, 2013;Z.-y.…”

Section: Capital Regulationmentioning

confidence: 99%

“…Findings of Kwan and Eisenbeis (1997) support the hypothesis of moral hazard which means that banks with high profitability are less vulnerable than banks with low profitability. There is a negative significance impact of profitability on risk (Lin et al, 2005;J. Zhang, Jiang, Qu, & Wang, 2013).…”

Section: Profitabilitymentioning

confidence: 99%

Factors affecting the Risk-taking Behavior of Commercial Banks in Bangladesh

Rahman

Uddin

Moudud‐Ul‐Huq

2015

AFA

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This study examines the capital regulation, profitability, bank size, liquidity, off-balance sheet activities, charter value, dividend payout ratio and macroeconomic variables as determinants of bank risk (credit risk and overall risk) by using information from 30 Bangladeshi commercial banks over a period of [2005][2006][2007][2008][2009][2010][2011][2012][2013]. We use Generalized Methods of Moments (GMM) in an unbalanced dynamic panel data framework. The empirical results show a negative relation between credit risk and capital regulation and a mixed relation between overall risk and capital regulation. We find a negative relation between credit risk and profitability and a positive relation between overall risk and profitability. The results also show that larger banks take higher credit and overall risk. It is also evident that off-balance sheet activities are positively related with both credit and overall risk. We also find that banks with high liquidity take more credit risk. Negative association is found between credit risk and charter value and mixed evidence is found on the relationship between charter value and overall risk. We also observe that dividend payout ratio is not an important factor of bank risk. With regard to the impact of macroeconomic variables we find no significant impact on risk. Finally we find that lagged risk is an important determinant of bank risk.

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Risk-based capital adequacy in assessing on insolvency-risk and financial performances in Taiwan's banking industry

Cited by 58 publications

References 19 publications

The disciplinary effect of subordinated debt on bank risk taking

The disciplinary effect of subordinated debt on bank risk taking

Bank Disclosures and their Impact on Credit Risk: Evidence from Bangladesh

Factors affecting the Risk-taking Behavior of Commercial Banks in Bangladesh

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