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The Effects of Regulatory Capital Requirements and Ownership Structure on Bank Lending in Emerging Asian Markets

Author

Listed:
  • Yasmeen Akhtar

    () (Department of Management Science, COMSATS University, Islamabad 44000, Pakistan)

  • Ghulam Mujtaba Kayani

    () (Department of Management Science, COMSATS University, Islamabad 44000, Pakistan)

  • Tahir Yousaf

    () (Business School of Sichuan University, Chengdu 610207, China)

Abstract

This study examines the impact of regulatory capital requirements and ownership structure on bank lending in Emerging Asian Markets. The findings of the study imply that banks with excess capital are less affected by capital constraints and enjoy opportunities to extend their credit portfolios. The monitory policy indicator has the expected negative and significant impact on bank lending. In case of well-capitalized banks, the interaction between the excess capital and monetary policy indicator has a significant positive relation with bank lending, which means that banks with excess capital have capability to raise uninsured financing and shield their loan portfolios as compared to less-capitalized banks that reduce their lending in the period of monetary tightening. In the case of bank ownership structure, banks with excess capital ratios and ownership concentration lead towards an increase in lending activity. The findings also show that well-capitalized banks with managerial ownership tend to reduce lending which validates agency theory of corporate governance.

Suggested Citation

  • Yasmeen Akhtar & Ghulam Mujtaba Kayani & Tahir Yousaf, 2019. "The Effects of Regulatory Capital Requirements and Ownership Structure on Bank Lending in Emerging Asian Markets," Journal of Risk and Financial Management, MDPI, Open Access Journal, vol. 12(3), pages 1-20, September.
  • Handle: RePEc:gam:jjrfmx:v:12:y:2019:i:3:p:142-:d:265520
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    regulatory capital requirements; ownership structure; bank lending; monetary policy indicator; emerging Asian markets;

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • E - Macroeconomics and Monetary Economics
    • F2 - International Economics - - International Factor Movements and International Business
    • F3 - International Economics - - International Finance
    • G - Financial Economics

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