The Impact of Changes in Basel Capital Requirements on the Resilience of African Commercial Banks
Focusing on a panel sample of 41 commercial banks over the period of 2000-2018, this study examined the effect of capital adequacy on the resilience of commercial banks in Africa under changing Basel levels (II, III, and the proposed Basel IV). The study created sample representative banks for the p...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Editura Universităţii „Alexandru Ioan Cuza” din Iaşi / Alexandru Ioan Cuza University of Iasi Publishing house
2022-03-01
|
| Series: | Scientific Annals of Economics and Business |
| Subjects: | |
| Online Access: | http://saeb.feaa.uaic.ro/index.php/saeb/article/view/1339 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849313783837622272 |
|---|---|
| author | Damilola Oyetade Adefemi A. Obalade Paul-Francois Muzindutsi |
| author_facet | Damilola Oyetade Adefemi A. Obalade Paul-Francois Muzindutsi |
| author_sort | Damilola Oyetade |
| collection | DOAJ |
| description | Focusing on a panel sample of 41 commercial banks over the period of 2000-2018, this study examined the effect of capital adequacy on the resilience of commercial banks in Africa under changing Basel levels (II, III, and the proposed Basel IV). The study created sample representative banks for the proposed Basel IV and used two measures, namely Z-score and CAMELS, to capture bank resilience. Using the panel logistic regression and fixed effect model, we found that capital adequacy, liquidity, earnings management efficiency, and macroeconomic conditions are key determinants of the resilience of commercial banks in Africa. Additionally, Basel compliant banks tend to be less prone to macroeconomic factors. Based on the positive and significant impact of all Basel capital ratios on Zscore, the results suggest that a high level of capital requirements increases African banks' resilience, and banks with higher capital can absorb risk exposures. |
| format | Article |
| id | doaj-art-11e15c973e8a410ca8b538dda3a5fed5 |
| institution | Kabale University |
| issn | 2501-3165 |
| language | English |
| publishDate | 2022-03-01 |
| publisher | Editura Universităţii „Alexandru Ioan Cuza” din Iaşi / Alexandru Ioan Cuza University of Iasi Publishing house |
| record_format | Article |
| series | Scientific Annals of Economics and Business |
| spelling | doaj-art-11e15c973e8a410ca8b538dda3a5fed52025-08-20T03:52:39ZengEditura Universităţii „Alexandru Ioan Cuza” din Iaşi / Alexandru Ioan Cuza University of Iasi Publishing houseScientific Annals of Economics and Business2501-31652022-03-0169111113210.47743/saeb-2022-0001370The Impact of Changes in Basel Capital Requirements on the Resilience of African Commercial BanksDamilola Oyetade0Adefemi A. Obalade1Paul-Francois Muzindutsi2University of KwaZulu-NatalUniversity of KwaZulu-NatalUniversity of KwaZulu-NatalFocusing on a panel sample of 41 commercial banks over the period of 2000-2018, this study examined the effect of capital adequacy on the resilience of commercial banks in Africa under changing Basel levels (II, III, and the proposed Basel IV). The study created sample representative banks for the proposed Basel IV and used two measures, namely Z-score and CAMELS, to capture bank resilience. Using the panel logistic regression and fixed effect model, we found that capital adequacy, liquidity, earnings management efficiency, and macroeconomic conditions are key determinants of the resilience of commercial banks in Africa. Additionally, Basel compliant banks tend to be less prone to macroeconomic factors. Based on the positive and significant impact of all Basel capital ratios on Zscore, the results suggest that a high level of capital requirements increases African banks' resilience, and banks with higher capital can absorb risk exposures.http://saeb.feaa.uaic.ro/index.php/saeb/article/view/1339bank riskbasel capital requirementsresilienceafrican banks. |
| spellingShingle | Damilola Oyetade Adefemi A. Obalade Paul-Francois Muzindutsi The Impact of Changes in Basel Capital Requirements on the Resilience of African Commercial Banks Scientific Annals of Economics and Business bank risk basel capital requirements resilience african banks. |
| title | The Impact of Changes in Basel Capital Requirements on the Resilience of African Commercial Banks |
| title_full | The Impact of Changes in Basel Capital Requirements on the Resilience of African Commercial Banks |
| title_fullStr | The Impact of Changes in Basel Capital Requirements on the Resilience of African Commercial Banks |
| title_full_unstemmed | The Impact of Changes in Basel Capital Requirements on the Resilience of African Commercial Banks |
| title_short | The Impact of Changes in Basel Capital Requirements on the Resilience of African Commercial Banks |
| title_sort | impact of changes in basel capital requirements on the resilience of african commercial banks |
| topic | bank risk basel capital requirements resilience african banks. |
| url | http://saeb.feaa.uaic.ro/index.php/saeb/article/view/1339 |
| work_keys_str_mv | AT damilolaoyetade theimpactofchangesinbaselcapitalrequirementsontheresilienceofafricancommercialbanks AT adefemiaobalade theimpactofchangesinbaselcapitalrequirementsontheresilienceofafricancommercialbanks AT paulfrancoismuzindutsi theimpactofchangesinbaselcapitalrequirementsontheresilienceofafricancommercialbanks AT damilolaoyetade impactofchangesinbaselcapitalrequirementsontheresilienceofafricancommercialbanks AT adefemiaobalade impactofchangesinbaselcapitalrequirementsontheresilienceofafricancommercialbanks AT paulfrancoismuzindutsi impactofchangesinbaselcapitalrequirementsontheresilienceofafricancommercialbanks |