In this article, we test the potential impact of the owner’s identity on banks’ capital adequacy and liquidity risk as defined by the Basel III regulatory framework. Using a unique dataset on a sample of banks domiciled in the Middle East and North Africa region, we find that the ownership structure is an important driver of banks’ regulatory capital and liquidity risk. Private and foreign investors exhibit a stronger preference for higher levels of capital, whereas the impact of government ownership on banks’ risk remains inconclusive. Moreover, privately-owned banks evidenced lower levels of liquidity risk compared to the other groups during the last financial crisis because of tighter budget constraints and more compelling liquidity needs.
Duqi, A., Al-Tamimi, H. (2018). The Impact of Owner’s Identity on Banks’ Capital Adequacy and Liquidity Risk. EMERGING MARKETS FINANCE & TRADE, 54(2), 468-488 [10.1080/1540496X.2016.1262255].
The Impact of Owner’s Identity on Banks’ Capital Adequacy and Liquidity Risk
Duqi, Andi
;
2018
Abstract
In this article, we test the potential impact of the owner’s identity on banks’ capital adequacy and liquidity risk as defined by the Basel III regulatory framework. Using a unique dataset on a sample of banks domiciled in the Middle East and North Africa region, we find that the ownership structure is an important driver of banks’ regulatory capital and liquidity risk. Private and foreign investors exhibit a stronger preference for higher levels of capital, whereas the impact of government ownership on banks’ risk remains inconclusive. Moreover, privately-owned banks evidenced lower levels of liquidity risk compared to the other groups during the last financial crisis because of tighter budget constraints and more compelling liquidity needs.File | Dimensione | Formato | |
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