Study on the Role of Financial Market’s Development in Capital Ratio of Banks Listed on the Tehran Stock Exchange

Abstract

Market development is one of the goals of accelerated and continuous economic growth which plays a major role and has always been one of the key topics in economic development, thus, market development is considered as one of the preconditions for growth and economic development. The objective of this article is evaluation of the effect of financial market and bank’s development on capital ratio of banks listed on the Tehran Stock Exchange during the period from 2009 to 2014 which includes 11 banks and 66 observations. Spss and Eviews were used to test the hypotheses. The results indicated that there is a direct and significant relation between the development of capital market and capital ratio of bank and direct and significant relation between the development of bank and capital ratio of bank.

Keywords

• development of capital markets
• development of bank
• capital ratio
• economic development