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Panel Data Analysis to Identifty the Factors Affecting Capital Adequacy Ratio of Deposit Banks

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  • Ersan Özgür

Abstract

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.

Suggested Citation

  • Ersan Özgür, 2021. "Panel Data Analysis to Identifty the Factors Affecting Capital Adequacy Ratio of Deposit Banks," Journal of Global Economy, Research Centre for Social Sciences,Mumbai, India, vol. 17(2), pages 77-89, June.
    • Handle: RePEc:jge:journl:1721
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    More about this item

    Keywords

    Deposit banks; Capital adequacy ratio; Panel data analysis;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • I2 - Health, Education, and Welfare - - Education

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