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Capital Adequacy Ratios And Compliance With Basel Iii: Evidence From Albania

Author

Listed:
  • KEQA, Flamur

    (Epoka University in Tirana, Albania)

  • ERGÜN, Uğur

    (Epoka University Tirana, Albania)

Abstract

The capital adequacy regulations are safety mechanism for regulators and banks’ shareholders/depositors to minimize expected and unexpected risks from the solvency point of which arise as a result of liquidity risk and the credit risk in daily operations. National bank regulators are responsible to set capital adequacy requirements while international mandate is given to the Bank for International Settlement. The capital requirements of Bank for International Settlement are mandatory for their members while other regulatory authorities have competence to set independent requirements. In practice all of them are adopting prudent requirements similar to international standards. The study covers 12 banks in Albania for the period 2010-2018 examining the capital adequacy ratios and compliance of capital with international requirements. The result of our study show that banking system is well-capitalized and capital ratios are above the national and international capital requirements proving healthy banking system from the capital adequacy perspective.

Suggested Citation

  • KEQA, Flamur & ERGÜN, Uğur, 2020. "Capital Adequacy Ratios And Compliance With Basel Iii: Evidence From Albania," Journal of Financial and Monetary Economics, Centre of Financial and Monetary Research "Victor Slavescu", vol. 8(1), pages 112-118, October.
    • Handle: RePEc:vls:rojfme:v:8:y:2020:i:1:p:112-118
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    capital adequacy ratio; Western Balkan; national & international regulators; banking; commercial banks;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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