Capital Regulation, Risk-Taking, Bank Lending and Depositor Discipline

In this dissertation we investigate different aspects of capital regulations and their impact on the behavior of commercial banks. In chapter two, we foucs on the impact of capital regulations on risk-taking of commercial banks in developed and developoing countries separately and togahter. We find that such regulations indeed reduce the risk taking of commercial banks. At the same time, we examine the relationship between capital ratios and risk taking. In line with previous literature, we find that this ratio is negative also. Further examinations including the degree of liberalization and the level of finanicl development did not yield conclusive results. In chapter three, we examine the relationship between the capital regulations and total lending and total depositis. We do not find conclusive evidence in support of the ‘credit crunch' or the ‘ risk retrenchment' hypothesis. However, several important variables do show a tendency to change with capital ratios. As a result, changes in capital ratios in response to regulations do have important impact on bank lending and decision making. In chapter four, we study five South East Asian countries within the context of the crisis of 1996. First we test for the existence of depositor discipline in these countries and find that the sate of such discipline is very weak even after such a huge crisis. We also test the degree of risk taking in the banking industry in these countries. Evidence shows that perfect competition prevails in the bankins secotr. We also try to establist the link between "the index of depositor discipline" and "index of competition". But we don't find evidence in support of this.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics and Finance

Year

2007

Author dc:creator

• Hussain, Mohammed Ershad

Contributors dc:contributor

• Varela, Oscar; Hassan, Mohammed K.
• Davis, J. Ronnie
• Gleason, Katherine

• Bank Regulations
• Depositor Discipline
• Risk Taking
• Basel Capital Regulations
• Credit Crunch

Repository record dc:identifier

https://scholarworks.uno.edu/td/568

OAI identifier oai:identifier

oai:scholarworks.uno.edu:td-1568