Capital requirements, banking supervision and lending behavior: evidence from Tunisia

Brahim Guizani

Middle East Development Journal, 2015, vol. 7, issue 2, 175-194

Abstract: This paper represents a contribution to the very meager literature on the impact of the prudential regulations on Tunisian bank behavior. It attempts to examine the effect of the capital requirements on bank credits during the period from 1999 to 2010 and assess the effectiveness of the banking supervision policy in containing the financial system's risk. On the basis of a theoretical dynamic model, the results show that the capital requirement ratio was binding bank credits during the period of study; well-capitalized banks have been lending more than less-capitalized ones. Despite this apparent stringency of the Tunisian bank regulator, our paper reveals that the supervision policy was weakly effective in restraining systemic risk. This research recommends further reinforcement of the supervision policy and initiating the assessment of its current design in order to improve its effectiveness.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/17938120.2015.1072930 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Capital Requirements, Banking Supervision and Lending Behavior: Evidence from Tunisia (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rmdjxx:v:7:y:2015:i:2:p:175-194

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rmdj20

DOI: 10.1080/17938120.2015.1072930

Access Statistics for this article

Middle East Development Journal is currently edited by Raimundo Soto

More articles in Middle East Development Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().