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An Empirical Analysis of Capital Adequacy in the Banking Sub-Sector of the Nigeria Economy  [cached]
Samson Ogege,Harley Tega Williams,Apollos Emerah
International Journal of Economics and Finance , 2012, DOI: 10.5539/ijef.v4n5p208
Abstract: The paper sets out to examine the impact of capital adequacy in the banking sub-sector and the growth of Nigeria economy. It specifically seeks to ascertain the effect of bank capital base and macroeconomic variables. Nigeria’s data set from CBN statistical bulletin (2009) during the period 1980-2010 was used. It employed the error correction framework and co-integration techniques to test the relationship between bank capital base and macroeconomics variables. This implies that political stability may reduce financial distress and bankruptcy why foreign investment will affect Banks capital in most developing economy in the period of financial crisis. However, the study also establishes that there is a negative relationship between inflation and banks capital base as inflation erode banks capital in most developing economy. This simply means that Nigerian government should regulate investment policy why banks regulators should strive to keep inflation rate at a minimum level, if possible below 5% for them to be more efficient so as to be globally competitive.
Determinants of capital adequacy in the Banking Sub-Sector of the Nigeria Economy: Efficacy of Camels. (A Model Specification with Co-Integration Analysis)  [PDF]
Harley Tega Williams
International Journal of Academic Research in Business and Social Sciences , 2011,
Abstract: This study investigates the impact of banks characteristics, financial structure and macroeconomic indicators on banks Capital base in the Nigerian banking industry. The study does not account for ratio analysis in the computation of capital adequacy but rather it examines the determinant of Capital adequacy in Nigeria during the period 1980 – 2008 within an error correction framework. Co-integration technique revealed that economic indicators such as rate of inflation, real exchange rate, demand deposits, money supply, political instability, return on investment are most robust predictors of the determinants of capital adequacy in Nigeria. After the global credit crunch capital adequacy, being critical for banks, led the study to examine the relationship between bank capital base and macroeconomics variables. This implies that political stability may reduce financial distress and bankruptcy why Foreign investment will affect Banks capital in most developing economy in the period of financial crisis . However, the study also establishes that there is a negative relationship between inflation and banks capital base as inflation erode banks capital in most developing economy. This simply means that Nigerian government should regulate investment policy why banks regulators should strive to keep inflation rate at a minimum level, if possible below 5% for them to be more efficient so as to be globally competitive.
Banka Sermaye Yeterlili inde Basel II Yakla m ve Türk Bankac l = Basel II Approach at Bank Capital Adequacy and Turkish Banking  [cached]
Faik ?EL?K, ?hsan KIZIL
Dogus University Journal , 2008,
Abstract: The Basel Committee on Banking Supervision is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten countries in 1975. It usually meets at the Bank for International Settlements in Basel, where its permanent Secretariat is located. It sets out the details of the agreed Framework for measuring capital adequacy and the minimum standard. In Basel II to revise the 1988 Accord has been to develop a framework that would further strengthen the soundness and stability. The Committee is also retaining key elements of the 1988 capital adequacy framework, including the general requirement for banks to hold total capital equivalent to at least 8% of their risk-weighted assets; the basic structure of the 1996 Market Risk Amendment regarding the treatment of market risk; and the definition of eligible capital. Basel II is more risk sensitive than the 1988 Accord higher than allowed for in this Framework.
The Internal Capital Adequacy Assessment Process ICAAP – a New Challenge for the Romanian Banking System
Arion Negrila
Theoretical and Applied Economics , 2009,
Abstract: In the near future, Romanian banks will have to implement the second pillar of the Basel II (ICAAP) Agreement. Given this new challenge (in addition to the ongoing economic and financial crisis), my article analyzes and presents both the main requirements of the process, in compliance with the NBR regulation draft, as well as some of the principles and methods used by advanced banks.Thus, I’ve analyzed some of the methods for the assessment of economic capital requirements for credit, market and operational risks (while also explaining the difference between economic capital and regulatory capital), based on the theory of unexpected losses, sustained by case studies.
An empirical study to measure the impact of financial and macro economical figures on capital adequacy  [PDF]
Mohammad Khodaei Valahzaghard,Mohsen Babaei dazghei
Management Science Letters , 2012,
Abstract: Capital adequacy plays an important role for reducing different risk components in banking industry. In this paper, we present an empirical study to measure the impact of financial and macro economical factors on capital adequacy. We gather the necessary information from financial statements and balance sheets of nine Iranian private banks over the period of 2005-2011. The results of analyzing the data based on the implementation of linear regression technique reveal that there are some meaningful relationship between financial figures, including bank size and profitability, and capital adequacy. However, the survey does not show any relationship between macro economical factors, including growth domestic product and inflations, and capital adequacy.
Capital Regulation and Italian Banking System: Theory and Empirical Evidence  [cached]
Enzo Scannella
International Journal of Economics and Finance , 2012, DOI: 10.5539/ijef.v4n2p31
Abstract: This paper aims to investigate the role of capital for banking institutions and provide an empirical analysis on large Italian banks’ capital adequacy. The paper is organized as follows. The first section introduces to the issue of the paper. The second section explains why the capital is important in the economics of banking firm. The paper reviews the theoretical literature on bank capital regulation. Empirical results on large Italian banks are reported on the third section. The final section contains summary and concluding comments.
Capital Structure and Financial Risks in Non-Conventional Banking System  [cached]
Wassim Rajhi,Slim Ahmed Hassairi
International Journal of Economics and Finance , 2012, DOI: 10.5539/ijef.v4n4p252
Abstract: We discuss issues of capital structure and enforcement in Islamic finance only to the extent that Islamic financial institutions differ from their conventional counterparts. Substantive differences do in fact exist. This paper presents the capital adequacy framework for Islamic banks compared to the setting up of the Basel II capital adequacy framework. We discusses of the risk profile of an Islamic banking and on the relationship between risk management and capital structure, it overviews specific risk categories for Islamic banks as an initial step in risk management, and highlight the differences and similarities in importance of these causes for Islamic banks. We present appropriate risk weights to unrestricted investments in order to defining their own capital requirements with regard to loss tolerance.
Banks’ Lending under the Capital Adequacy Supervision
Jun-xun DAI,Lu YANG
Canadian Social Science , 2007,
Abstract: Due to the profound influence of banking crisis on economic growth, the capital adequacy has been closely concerned by financial authorities in many nations. Thanks to globalization of business, the financing environment has improved. Therefore, a number of restrictions on banking sectors has been not as tough as once were. However, the requirements on capital adequacy have been stricter than ever. Yet the behavior adjustment of banking sectors and its effects on every aspects of national economy still provokes controversy. As various theories and abundant evidences indicate --- the implementation of Basel Agreement would lead to social credit crunch due to the fact that national commercial banks reduce credit transaction in order to meet the requirement of capital regulation(8%), which would negatively affect the stability of macro-economy. This thesis intents to answer, via theoretical analysis and demonstration in banking system of Hubei Province, the question of potential adjustment and shrinking effects after implanting Capital Regulation of Commercial Banks. We believe since the implementing of new principle in 2004, each bank has adjusted their gross and structure of credit. The effect of credit crunch is mainly seen by the impacts on small and middle sized enterprises. Key words: capital adequacy, risk-taking incentives, credit crunch Résumé: En raison de l’influence profonde de la crise bancaire sur la croissance économique, les autorités financières de beaucoup de pays prêtent une grande attention à la suffisance du capital. Grace à la globalisation du commerce, l’environnment financier s’est amélioré. Donc, de nombreuses restrictions dans le secteur bancaire ne sont plus aussi dures qu’elles étaient autrefois. Cependant, l’exigence de la suffisance du capital est plus stricte qu’auparavant. L’ajustement du secteur bancaire et son influence sur tous les aspects de l’économie nationale provoquent quant même des controverses. De diverses théories et des preuves abondantes indiquent que l’application de Basel Agreement pourrait conduire au resserrement de crédit d au fait que les banques commerciales réduisent leur offre de crédit afin de répondre à la demande de la régulation du capital(8%), ce qui pourrait affecter négativement la stabilité de la macro-économie. L’essai présent tente de répondre, par le biais de l’analyse théorique et la démonstration du système bancaire de la province du Hubei, à la question de l’ajustement potentiel et des effets diminutifs après la mise en oeuvre de la Régulation du Capital des Banques Commerciales. Nous cr
The Influence of Capital Adequacy on Asset Quality Position of Banks in Tanzania  [cached]
Dickson Pastory,Marobhe Mutaju
International Journal of Economics and Finance , 2013, DOI: 10.5539/ijef.v5n2p179
Abstract: This paper has extensively analyzed the relationship between the capital adequacy and asset quality of commercial the banks in Tanzania. The study employed Panel secondary data from 33 banks in the period (2006-2011) and the linear Regression model was used to test for the relationship between the two variables. The findings indicate that capital adequacy has a great influence on the asset quality. The increase in capital ratios has sometimes reduced the asset quality productivity and in most cases the levels of non-performing loans and non-performing asset have been increased with the increase in capital ratios. CAEL analysis indicated the banks financial position to be stable and meet the regulatory requirements. It has been recommended that the bank of Tanzania (BOT) should foster their strength in supervision as the two categories have been viewed to be very crucial and do increase the stability of the banking system.
Foreign capital in the banking market of Ukraine
Podchesova, Valeriya Yuriyivna,Sydorenko, Mykhaylo Yuriyovych
Socìal?no-ekonomì?nì Problemì ì Der?ava , 2012,
Abstract: This article deals with foreign banks’ activity in Ukraine. Their motivation andfactors influencing the final decision on entering the new market were viewed. Fumerous potentialpositive or negative consequences of foreign banks’ expansion for the national bank’s market,consumers and economic sectors were examined. The activity’s dynamics, allocation of overseasbanks’ capital depending on the country of origin, their prospects and problems of furtherdevelopment in the Ukrainian banking market were analyzed. Changes in foreign banks’ strategyand tactics under global financial crisis conditions were paid special attention to: decreasing ofwest capital banks’ number in certain banking market’s segments or even absolute secede a varietyof banking companies from the market. Ways of improvement of native banking system activityproviding both the development of Ukrainian economy and foreign investors’ interests wereproposed.
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