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The effects of banking regulations on banking performance in selected emerging countries

Author

Listed:
  • Burak Buyukoglu
  • Ibrahim Halil Eksi
  • Almir Alihodzic
  • Mosab I. Tabash

Abstract

In terms of both developed and developing countries, banking regulations have a very important place for regulatory authorities and investors. The study aims to examine the effects of regulations on banking performance and profitability. The effects of regulatory indicators such as capital adequacy, liquidity, and total provisions on the return on assets of banks are examined. In this study, Annual data set of 53 banks operating in selected Balkan countries and Turkey was constructed for the study, and analysis estimation using the System Generalized Moments Method (SGMM) were carried out. In addition, GDP, Inflation, Total Assets, and Budget deficits are used as control variables. According to the findings obtained from the study, it has been ascertained that the primary determinant impacting the return on assets is capital adequacy as per the regulatory criterion. Apart from this, it has been concluded that liquidity, which is one of the other regulatory indicators, has a positive and a negative effect on its counterparts in terms of its effects on return on assets. According to the research analysis applied in the study, it has been concluded that the regulatory indicators increase the profitability of capital adequacy and liquidity.

Suggested Citation

  • Burak Buyukoglu & Ibrahim Halil Eksi & Almir Alihodzic & Mosab I. Tabash, 2023. "The effects of banking regulations on banking performance in selected emerging countries," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 17(2), pages 228-236.
  • Handle: RePEc:oap:ijaefa:v:17:y:2023:i:2:p:228-236:id:1112
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