Social and Behavioral Sciences Commons^™

Capital Adequacy Requirement And Bank Behaviour In Nigeria, Baba Nmadu Yaaba, Lailah G. Sanusi

Bullion

The divergent views on the usefulness of capital adequacy ratio (CAR) in controlling the risk appetite of banks necessitates further research on its efficiency and effectiveness. Whereas proponents of CAR believe that it enhances the soundness and stability of the banking system, opponents contend that it can impedes on the intermediating capabilities of banks and possibly ignites credit crunch that could induce fall in the level of output. This study empirical verifies the infuence of CAR on the behavior of banks in Nigeria. The study adopts a system of simultaneous equation, in the tradition of Maraghni (2017) using Generalized Method …