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Capital Requirements, Banking Supervision and Lending Behavior: Evidence from Tunisia

Brahim Guizani

MPRA Paper from University Library of Munich, Germany

Abstract: This paper represents a contribution to the still meager literature on the impact of prudential regulation bank behavior in Tunisia. It aims to examine the effect of the capital requirements on bank credits during the period from 1999 through 2010 and to assess the effectiveness of the banking supervision policy in containing banking system’s risk. For this purpose a dynamic model is built and then an empirical regression is estimated. The results shows that regulatory capital framework has been binding bank lending in Tunisia during the period of study; well-capitalized banks have lent more than less-capitalized ones. Despite the apparent stringency of the bank regulator in Tunisia, banking supervision has been weakly effective in restraining banks’ overall risk. Further strengthening of the banking supervision policy is still needed on the part of the central bank of Tunisia; i.e., the bank regulator.

Keywords: capital requirements; Basel Accords; dynamic model; banking supervision; non-performing loans. (search for similar items in EconPapers)
JEL-codes: C63 D92 G21 G28 (search for similar items in EconPapers)
Date: 2014-03-08
New Economics Papers: this item is included in nep-ara, nep-ban and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Capital requirements, banking supervision and lending behavior: evidence from Tunisia (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:54234

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