Bank Size, Risk-taking and Capital Regulation in Bangladesh

Journal article

Rahman, M.M., Zheng, C. and Ashraf, B. (2015). Bank Size, Risk-taking and Capital Regulation in Bangladesh. Eurasian Journal of Business and Economics. 8 (15), pp. 95-114. https://doi.org/10.17015/ejbe.2015.015.05
AuthorsRahman, M.M., Zheng, C. and Ashraf, B.
Abstract

This study examines the impact of bank size on bank regulatory capital ratios and risk-taking behavior using a panel dataset of 30 Bangladeshi commercial banks over
the period 2008-2012. The relationship between bank regulatory capital ratios and bank risk-taking is also examined. For empirical analysis, generalized methods of
moments (GMM) panel method are used to explore the relationships among bank size, regulatory capital ratios and risk-taking behavior. Empirical results show that
large banks hold lower amount of capital and take higher level of risk. Findings also show a reverse relationship between bank capital levels and bank risk-taking; that
is, banks holding higher levels of regulatory capital are significantly less risky. Findings of this study has important implications for the Bangladeshi government,
policy makers, banking regulators and bank stakeholders regarding bank size, regulatory capital requirements and overall banking sector risk-taking behavior.

Year2015
JournalEurasian Journal of Business and Economics
Journal citation8 (15), pp. 95-114
PublisherInternational Ataturk Alatoo University
ISSN1694-5948
Digital Object Identifier (DOI)https://doi.org/10.17015/ejbe.2015.015.05
Web address (URL)http://dx.doi.org/10.17015/ejbe.2015.015.05
Publication dates
Online15 May 2015
Publication process dates
Deposited17 Nov 2022
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Open
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