Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators

Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators

This study is the first attempt to investigate the relationship between the level of risky assets and capital level in a mixed Malaysian banking system covering 83 months starting December 2006. The results of dynamic ordinary least squares indicate positive relationship between capital ratio (CAR...

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Main Authors: Abdul Wahab, Hishamuddin, Saiti, Buerhan, Rosly, Saiful Azhar, Mohammed Masih, Abul Mansur
Format: Article
Language:English
English
English
Published: Taylor & Francis 2017
Subjects:
HG1501 Banking
Online Access:http://irep.iium.edu.my/51522/
http://irep.iium.edu.my/51522/
http://irep.iium.edu.my/51522/
http://irep.iium.edu.my/51522/1/51522-Risk-taking%20behavior%20and%20capital.pdf
http://irep.iium.edu.my/51522/13/51522_Risk-taking%20behavior%20and%20capital%20adequacy_WOS.pdf
http://irep.iium.edu.my/51522/14/51522_Risk-taking%20behavior%20and%20capital%20adequacy_SCOPUS.pdf
id iium-51522
recordtype eprints
spelling iium-515222016-12-22T02:46:53Z http://irep.iium.edu.my/51522/ Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators Abdul Wahab, Hishamuddin Saiti, Buerhan Rosly, Saiful Azhar Mohammed Masih, Abul Mansur HG1501 Banking This study is the first attempt to investigate the relationship between the level of risky assets and capital level in a mixed Malaysian banking system covering 83 months starting December 2006. The results of dynamic ordinary least squares indicate positive relationship between capital ratio (CAR) and risk-weighted asset ratio (RWA) in the long run. Furthermore, the causality analysis based on panel VECM 15 and two-step dynamic system generalized method of moments indicates unidirectional causality from CAR to RWA. Our results further suggest that higher capital growth and capital buffer provide an extra cushion for the Malaysian banks to pursue relatively riskier financial activities, and the nature of risk-taking behavior of Islamic banks follows that of the conventional banks. Taylor & Francis 2017 Article PeerReviewed application/pdf en http://irep.iium.edu.my/51522/1/51522-Risk-taking%20behavior%20and%20capital.pdf application/pdf en http://irep.iium.edu.my/51522/13/51522_Risk-taking%20behavior%20and%20capital%20adequacy_WOS.pdf application/pdf en http://irep.iium.edu.my/51522/14/51522_Risk-taking%20behavior%20and%20capital%20adequacy_SCOPUS.pdf Abdul Wahab, Hishamuddin and Saiti, Buerhan and Rosly, Saiful Azhar and Mohammed Masih, Abul Mansur (2017) Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators. Emerging Markets Finance and Trade, 53 (1). pp. 180-198. ISSN 1540-496X E-ISSN 1558-0938 http://www.tandfonline.com/eprint/NvksIWkINcqWqDP6PeEg/full 10.1080/1540496X.2016.1162151
repository_type Digital Repository
institution_category Local University
institution International Islamic University Malaysia
building IIUM Repository
collection Online Access
language English
English
English
topic HG1501 Banking
spellingShingle HG1501 Banking
Abdul Wahab, Hishamuddin
Saiti, Buerhan
Rosly, Saiful Azhar
Mohammed Masih, Abul Mansur
Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators
description This study is the first attempt to investigate the relationship between the level of risky assets and capital level in a mixed Malaysian banking system covering 83 months starting December 2006. The results of dynamic ordinary least squares indicate positive relationship between capital ratio (CAR) and risk-weighted asset ratio (RWA) in the long run. Furthermore, the causality analysis based on panel VECM 15 and two-step dynamic system generalized method of moments indicates unidirectional causality from CAR to RWA. Our results further suggest that higher capital growth and capital buffer provide an extra cushion for the Malaysian banks to pursue relatively riskier financial activities, and the nature of risk-taking behavior of Islamic banks follows that of the conventional banks.
format Article
author Abdul Wahab, Hishamuddin
Saiti, Buerhan
Rosly, Saiful Azhar
Mohammed Masih, Abul Mansur
author_facet Abdul Wahab, Hishamuddin
Saiti, Buerhan
Rosly, Saiful Azhar
Mohammed Masih, Abul Mansur
author_sort Abdul Wahab, Hishamuddin
title Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators
title_short Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators
title_full Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators
title_fullStr Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators
title_full_unstemmed Risk-taking behavior and capital adequacy in a mixed banking system: new evidence from Malaysia using dynamic OLS and two-step dynamic system GMM estimators
title_sort risk-taking behavior and capital adequacy in a mixed banking system: new evidence from malaysia using dynamic ols and two-step dynamic system gmm estimators
publisher Taylor & Francis
publishDate 2017
url http://irep.iium.edu.my/51522/
http://irep.iium.edu.my/51522/
http://irep.iium.edu.my/51522/
http://irep.iium.edu.my/51522/1/51522-Risk-taking%20behavior%20and%20capital.pdf
http://irep.iium.edu.my/51522/13/51522_Risk-taking%20behavior%20and%20capital%20adequacy_WOS.pdf
http://irep.iium.edu.my/51522/14/51522_Risk-taking%20behavior%20and%20capital%20adequacy_SCOPUS.pdf
first_indexed 2023-09-18T21:12:56Z
last_indexed 2023-09-18T21:12:56Z
_version_ 1777411373756579840

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