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The Effects of Bank Capital Adequacy Deviation on the Bank Lending (Case Study: Iran)
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Mahshid Shahchera1   , Zeinab Biyabani *2 |
1- monetary and banking Research institution
2- central bank of Iran |
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Abstract: (209 Views) |
One of the main functions of banks is maturity transformation as borrowing in the form of deposit in the short term and lending long term. The role of banks in financing and investment needs of businesses is obvious. Bank lending to applicants through the effective action takes place. In this regard, having adequate and sufficient capital is critical to keeping up the health of the banking system. In the meantime, as the most important international agreement in order to ensure banking health the rules of the Basel committee's agreements have paid special attention to the observance of the minimum capital adequacy. Considering the importance of this issue and since banks are one of the most important providers of financial resources in Iran, In this study, by using the financial ratios and characteristics of the balance sheet structure of 25 banks active in the country's banking system, in the period of 1385 to 1398, capital adequacy deviation index was proposed. In the following, the effect of the suggested capital adequacy deviation index as an independent variable along with other banking and macroeconomic variables on the bank lending by the method of generalized moments (GMM) are discussed. Accordingly, the results show that the effect of the capital adequacy deviation index on the lending is confirmed, and the index has a significant and inverse relation on the bank lending. The research findings also indicate that the effect of bank size on banks' lending is confirmed, and bank size has a significant and direct effect on bank lending. Based on the results, the simultaneous effect of bank size and capital adequacy deviation index on the lending was also confirmed. In other words, the simultaneous effect of these two variables on the bank lending is inverse and significant.
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Article number: 5 |
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Full-Text [PDF 1130 kb]
(99 Downloads)
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Type of Study: Case Study |
Subject:
Financial Institutions and Services (G2)
Received: 2022/06/1 | Accepted: 2024/01/20 | Published: 2024/06/15
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