Basel Capital Requirements and Credit Crunch in the MENA Region [electronic resource] Ben Naceur, Sami.

Ben Naceur, Sami.
Washington, D.C. : International Monetary Fund, 2013.
IMF eLibrary
IMF Working Papers; Working Paper No. 13/160.
IMF Working Papers; Working Paper No. 13/160
Government document
1 online resource (39 p.)
Local subjects:
Assets. (search)
Balance sheets. (search)
Bank accounts. (search)
Bank assets. (search)
Bank balance sheets. (search)
Bank behavior. (search)
Bank capital. (search)
Bank capital regulation. (search)
Bank credit. (search)
Bank deposits. (search)
Bank for international settlements. (search)
Bank indonesia. (search)
Bank lending behavior. (search)
Bank portfolios. (search)
Bank regulators. (search)
Bank restructuring. (search)
Bank risk. (search)
Bank risk-taking. (search)
Bank soundness. (search)
Bank supervision. (search)
Bank web sites. (search)
Banking industry. (search)
Banking law. (search)
Banking legislation. (search)
Banking reform. (search)
Banking reforms. (search)
Banking regulations. (search)
Banking sector. (search)
Banking sector assets. (search)
Banking sector developments. (search)
Banking supervision. (search)
Banking system. (search)
Banks. (search)
Banks loans. (search)
Basel accord. (search)
Basel I Accord. (search)
Capital. (search)
Capital adequacy. (search)
Capital adequacy ratio. (search)
Capital base. (search)
Capital regulation. (search)
Capital requirement. (search)
Capital standard. (search)
Cross country analysis. (search)
Economics of Regulation. (search)
Excess liquidity. (search)
Financial Markets and the Macroeconomy. (search)
Financial risk. (search)
International banks. (search)
Lending behaviour. (search)
Loan. (search)
Macroeconomic stability. (search)
Mortgages. (search)
Other Depository Institutions. (search)
Panel data models. (search)
Prudential regulation. (search)
Resource allocation. (search)
Small bank. (search)
Tier 1 capital. (search)
Egypt. (search)
Jordan. (search)
Lebanon. (search)
Middle East. (search)
Morocco. (search)
North Africa. (search)
Tunisia. (search)
The 1988 Basel I Accord set the common requirements of bank capital to promote the soundness and stability of the international banking system. The agreement required banks to hold capital in proportion to their perceived credit risks, and this requirement may have caused a “credit crunch,” a significant reduction in the supply of credit. We investigate the direct link between the implementation of the Basel I Accord and lending activities, using a data set spanning annual observations covering 1989–2004 for banks in Egypt, Jordan, Lebanon, Morocco, and Tunisia. The results provide clear support for a significant increase in credit growth following the implementation of capital regulations, in general. Despite higher capital adequacy ratios, banks expanded credit and asset growth. Credit growth appears to be driven by demand fluctuations attributed to real growth, cost of borrowing, and exchange rate risk. Overall, the effects of macroeconomic variables, in contrast to capital adequacy, appear to be more dominant in determining credit growth, regardless of the capital adequacy ratio, and regardless of variation across banks by nationality, ownership, and listing.
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Ben Naceur, Sami.
Kandil, Magda E.
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