 Factors Affecting Capital Adequacy: An Application for the Turkish Banking SectorÖzgür Özel
Journal of Finance Letters (Maliye ve Finans Yazıları), 2024, vol. 39, issue 121, 147-174 Abstract: The adequacy of bank capital according to its risks is one of the leading conditions for the protection of its financial system. In this study, the long-term cointegration relationship between the capital adequacy ratio (CAR) variable of the Turkish banking sector for the period 2010-2022 and the NPL ratio and loan deposit ratio variables was investigated. As a result of the Johansen cointegration test, the existence of a long-term cointegration relationship between the variables was determined. Moreover, according to the estimation results of FMOLS and DOLS cointegration regressions, it was seen that the NPL ratio was positively related to CAR and the loan-deposit ratio was negatively related. This result shows that there is a long-term relationship between NPL ratio, which is an indicator of banks' credit quality, and loandeposit ratio, which is a structural liquidity indicator, and CAR. Keywords: Turkish Banking Sector; Capital Adequacy Ratio; Cointegration; Dynamic Ordinary Least Squares Method (Dynamic OLS); Modified Ordinary Least Squares Method (Fully Modified OLS). (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:acc:malfin:v:39:y:2024:i:121:p:147-174 DOI: 10.33203/mfy.1356381 Access Statistics for this article Journal of Finance Letters (Maliye ve Finans Yazıları) is currently edited by Süleyman Kale More articles in Journal of Finance Letters (Maliye ve Finans Yazıları) from Maliye ve Finans Yazıları Yayıncılık Ltd. Şti. |
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