Bank capital requirement on bank risk taking: case of commercial bank in Malaysia / Farah Nadiah Ishak
In term of finance, capital requirement is the standardized requirement in place for banks that determine how much liquidity is required to be held for a certain level of assets. Banks are highly levered firms, and the nature of their leverage is unique in the sense that a substantial portion of ban...
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| Format: | Thesis |
| Language: | English |
| Published: |
2017
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| Subjects: | |
| Online Access: | https://ir.uitm.edu.my/id/eprint/95596/1/95596.pdf |
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| Summary: | In term of finance, capital requirement is the standardized requirement in place for banks that determine how much liquidity is required to be held for a certain level of assets. Banks are highly levered firms, and the nature of their leverage is unique in the sense that a substantial portion of bank debt is "demandable" and is also part of the economy's payments system. Besides, banks are the most important financial intermediaries, which results from their role as providers of payments, loans and deposits, and as producers of information. Capital regulation was provoked by the concern that banks may hold capital less than what is socially optimal relative to their risk. In this case, regulators can enforce remedial covenants, such as restricting asset growth and certain activities or enforcing the raise of additional capital, which constrain the actions of banks. Because regulatory enforcements impose substantial costs on banks, they provide a vital incentive for banks to limit risk-taking. The expected study will determine capital adequacy ratio impact on bank risk taking with focus on Malaysia banking sector. The data of the expected study will be taken from the annual report as annually of the commercial bank in Malaysia. The type of the data that will be use is panel data which consist of eleven commercial banks from 2010 until 2015. The expected study is focus on effect of capital requirement on bank risk taking in Malaysia. The expected findings will depends on the variables effect of capital requirement on commercial bank risk's taking. |
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