Banks Capital Buffer and the Business Cycles (in Persian)

According to the role of cyclical behavior of capital buffer in the effectiveness of monetary policy, in this article the quarterly average capital buffer for the whole Iranian banking sector and each banking group has been estimated for the period 1386-1:1393-4 based on capital adequacy circular of the central bank of the Islamic Republic of Iran and its behavior has been compared with the business cycle. The results confirm the countercyclical behavior of the average capital buffer in the whole banking sector and in the commercial, specialized and privatized banks, despites its pro-cyclical behavior in the private banks. This variable performs the countercyclical behavior in the group of large private and privatized banks and small private banks, while it has the pro-cyclical characteristic in the group of small private and privatized banks and large private banks. Hence, the probability of neutralizing the monetary policy effect exerted with the aim of leaving recession would exist. Thus, the necessity of exerting strategies for dampening the severity of countercyclical behavior of regulatory capital buffer in the banking sector is observed.