The Impact of Capital Adequacy on Banking Risk-Evidence from Emerging Market

Osama Samih Shaban ()
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Osama Samih Shaban: Al-Zaytoonah University of Jordan

Chapter Chapter 69 in Applied Economic Research and Trends, 2024, pp 1209-1222 from Springer

Abstract: Abstract This study aimed to examine the impact of capital adequacy on banking risks in Jordanian commercial banks. In order to achieve the objectives of the study, the quantitative approach was adopted in this study, which focuses on describing the study sample and its variables, and then testing the hypotheses. The study population included all the Jordanian commercial banks in the Amman Stock Exchange (ASE). After verifying the published financial reports, all 13 commercial banks were accredited during the time period (2016–2021). The results of the study concluded that capital adequacy has a statistically significant effect in reducing risks in Jordanian commercial banks. The main recommendation encourages banks to focus on maintaining high levels of capital adequacy in order to reduce both credit risk and liquidity risk.

Keywords: Capital adequacy; Banking risks; Liquidity risk; Quantitative approach (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-49105-4_69

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DOI: 10.1007/978-3-031-49105-4_69

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