Paper Title
The Association Between Risk Taking and Capital Regulation and Performance of Commercial Banks in Jordan
Abstract
This paper empirically scrutinizes the effect of capital regulations on risk-taking and the financial performance of listed commercial banks in Jordan. It is based on the view that the effect of capital regulations on emerging economies such as Jordan has not received much attention in the literature..The issue is evaluated using a panel data of all Jordanian commercial banks listed on the Amman Stock Exchangeof(13) banks covering the period 2006 to 2019. The hypotheses were tested using the Generalized Method. Overall risk and default risk for the banks was used in distinguishing the different models in the regression equations. The results indicate that the imposition of capital regulations has a positive effect on financial performance and a negative impact on the risk-taking behavior of the firms. The level of risk held by the banks was also found to be negatively associated with the financial performance of the banks. The study suggests the need for better capital adequacy regulations and risk management for policymakers to improve the performance and stability of the banking sector in Jordan. and at the global and local level, there is great interest in taking reform measures and applying regulatory standards to contain risks and enhance financial stability
Keywords - Capital Regulations; Financial Firms; the Stability of Banks; Commercial Banks.