Munich Personal RePEc Archive

Risk, capital and financial crisis

Ghosh, Saibal (2014): Risk, capital and financial crisis. Published in: Borsa Istanbul Review , Vol. 14, No. 3 (June 2014): pp. 145-157.


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Employing data on over 100 banks for Gulf Cooperation Council (GCC) countries during 1996-2011, we test the relation between risk and capital. The findings indicate that banks generally increase capital in response to an increase in risk, and not vice versa. Second, there is an uneven impact of regulatory pressure and market discipline on banks attitude towards risk and capital. Additionally, Islamic banks increased their capital as compared to conventional banks.

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