The Determinants of Bank Risk Taking: Evidence From Jordan

Ali Awartany and Khaled Alzubi

International Journal of Financial Research, 2020, vol. 11, issue 6, 100-115

Abstract: This study examines the determinants of bank risk taking for a sample of 15 Jordanian banks, according to Basel I and Basel II standards for capital regulation and by testing the relationship between bank risk taking and banks financial information using multiple linear regression analysis. The study found that most Jordanian banks committed to capital adequacy ratio regulations which decrease the bank risk taking, Bank Risk Taking (RSK) was found to be adversely affected by Capital Adequacy Ratio (CAR), The Franchise value (FRN) has a negative effect on bank risk taking (RSK), The Stable Shareholder (HLD) variable has a significant positive effect on Bank Risk Taking (RSK). The squared value of Stable Shareholders (HLD_SQR) has a significant negative effect on Bank Risk Taking (RSK).

Keywords: bank risk taking; capital adequacy ratio; stable shareholders; franchise value; log of total assets; frequency (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:11:y:2020:i:6:p:100-115

DOI: 10.5430/ijfr.v11n6p100

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