Open AccessPanel Data Analysis to Identify the Factors Affecting Capital Adequacy Ratio of Deposit Banks
Author(s) -
Ersan Özgür
Publication year - 2021
Publication title -
journal of global economy
Language(s) - English
Resource type - Journals
eISSN - 2278-1277
pISSN - 0975-3931
DOI - 10.1956/jge.v17i2.622
Subject(s) - capital adequacy ratio , risk adjusted return on capital , basel ii , risk weighted asset , capital requirement , economics , variables , operational risk , variable (mathematics) , capital (architecture) , panel data , economic capital , credit risk , basel iii , econometrics , actuarial science , business , finance , statistics , risk management , financial capital , capital formation , mathematics , human capital , microeconomics , archaeology , profit (economics) , mathematical analysis , incentive , history , economic growth
Capital adequacy ratio serves as a basic indicator linking current equities of banks to the amount of risk that they can undertake. Therefore, it is taken into consideration while evaluating banks and expected to be at a normal level. According to the Basel I criteria published by the Basel Committee in 1988 for the international banking sector, capital adequacy ratio as “Total Capital / Credit Risk” should be at least 8%. Basel I Criteria began to be implemented in Turkey in 1992. In this process, it was decided that capital adequacy ratio would be implemented as 8% starting from 1998 in Turkey. The purpose of this study is to identify the factors affecting the capital adequacy of state-owned, private and foreign deposit banks operating in Turkey between 2009-2019. The result obtained from the analysis has revealed that the established model is significant. The ratio of independent variables for explaining the dependent variable is 36%. The independent variable OME has a statistically significant and positive effect on the dependent variable at 1% significance level.