Analysis of the Effects of Liquidity and Capital Requirements on the Financial Stability of Iranian banks (According to the rules of Basel III)

Abstract

The need to apply the requirements of the Basel III agreement in order to improve the performance of the banking system in the country and reduce the effects of the risks facing this sector, prompted this study to investigate the level of implementation of the Basel III guidelines and their effect on the performance of the banking system in Iran. In this regard, this research using the information obtained from the annual financial statements of 16 sample banks, including Bank Ekhtaz Novin, Parsian, Tejarat, Sina, Saderat, Kerebehan, Mellat, Post Bank, Saman, Pasargad, Day, Shahr, Tourism, Capital , the future and the Middle East for the annual period from 2013 to 2021 studies the state of the banking system in Iran. This research uses DID models to carry out the aforementioned investigation. Empirical findings showed that in the presence of the requirement of stable net investment ratio, bank size has a positive effect on the bank stability index. This is also true for the ratio of cash to property. However, the effect of net profit-to-equity ratio and liquidity (liquidity) on bank stability is negative, assuming the At the level of 5% effect of bank size, net interest to equity ratio, cash to asset balance, liquidity and capital flight under the conditions of 8% capital ratio requirement have a significant effect on the stability of the banks under the conditions of applying the 8% capital ratio requirement.requirement of stable net investment ratio.

Keywords

• liquidity requirements
• capital requirements
• financial stability
• basel rules