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Simultaneous Effect of Liquidity Risk and Credit Risk on the Stability of Banks that Accepted in Tehran Stock Exchange
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Hadi Radfar   , Mahshid Shahchera , Behnaz Saboori * |
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Abstract: (4601 Views) |
Banks are an essential elements of the financial discipline in many countries, and as financial intermediaries, they play a crucial role in achieving the growth and financial development of each state. Banking industry development and its efficiency can also lead to long-term economic growth and on the contrary, lack of banking network development may cause a decline in economic growth.
Regarding the role of banks in financial markets and countries economy, identification of factors affecting the stability, the bank's financial performance and the magnitude impact of each element is of great importance. The stability and performance of banks cause an increase in their profitability and also the public welfare level.
Meanwhile, the stability of the banking system as the core feature of the monetary-financial sector needs special consideration. Therefore, in the last two decades, financial stability has been considered as one of the main goals of the economic discipline by many policymakers and thinkers. This paper studies the simultaneous effect of liquidity risk and credentials risk on the stability of legitimized banks in Tehran Stock Exchange. The statistical population is the annual data of banks accepted in Tehran Exchange Stock from 2010 to 2017. The methodology used for model estimation is the dynamic data panel. The results of the model estimation show that the simultaneous effect of liquidity risk and credit risk variables on the banking stability index is negative and significant. The impact of bank scale and the fund ratio on bank stability index is positive and significant. Therefore, concerning the banking stability and risk management in banks play an essential role in monetary and financial markets. |
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| Keywords: Bank Stability, Bank Size, Liquidity Risk, Credit Risk |
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Full-Text [PDF 957 kb]
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Type of Study: Research |
Subject:
Special
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