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:: Volume 12, Issue 3 (Summer 2017) ::
J. Mon. Ec. 2017, 12(3): 235-249 Back to browse issues page
Capital Adequacy Ratio and Financing Behavior in Iran’s Banking System
Zahra Afshari *1, Mahsa Bagherzadeh1
1- Faculty of the Social Sciences and Economics, Alzahra University
Abstract:   (290 Views)
For Iran as an oil exporter country, heavy reliance on the extractive sector for generating fiscal revenues and export earnings translates into increased vulnerabilities to oil price shocks. The structure of the economic policy, and the   banking systems make macroprudential policy a particular relevant tool for Iran. The capital adequacy is a macro prudential instrument used to maintain the stability of Iranian financial system by considering the bank capital condition. This paper examines the impact of capital adequacy on financing behavior in Iranian banking system. The paper uses generalized method of moment estimation (GMM) technique and by employing bank-level data for both public and private banks covering the period 2003-2016, we analyze the reaction of bank financing behavior toward capital adequacy policy. The findings indicate that capital adequacy ratio is observed to be effective in curtailing financing behavior of banking institutions. Furthermore, the results reveal that the impact of capital adequacy in managing credit expansion of private banks was greater than public banks.
Keywords: Macroprudential, Banking System, Financing Behavior, Iran, GMM
Full-Text [PDF 210 kb]   (133 Downloads)    
Type of Study: Research | Subject: Macroeconomics
Received: 2018/10/4 | Accepted: 2019/03/5 | Published: 2019/09/23
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Afshari Z, Bagherzadeh M. Capital Adequacy Ratio and Financing Behavior in Iran’s Banking System. J. Mon. Ec.. 2017; 12 (3) :235-249
URL: http://jme.mbri.ac.ir/article-1-305-en.html


Volume 12, Issue 3 (Summer 2017) Back to browse issues page
Journal of Money and Economy Journal of Money And Economy
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