Investigating The Impact Of Capital Adequacy Ratio And Corruption On Bank Risk-Taking In Ghana

Bunyaminu A., Bashiru S., Amadu I. M., Yakubu I. N., Iddrisu A. J.

Academy of Accounting and Financial Studies Journal, vol.25, no.4, pp.1-7, 2021 (Scopus) identifier

  • Publication Type: Article / Article
  • Volume: 25 Issue: 4
  • Publication Date: 2021
  • Journal Name: Academy of Accounting and Financial Studies Journal
  • Journal Indexes: Scopus
  • Page Numbers: pp.1-7
  • Keywords: Bank-Risk Taking, Capital Adequacy, Corruption, Ghana, System GMM
  • Ankara Yıldırım Beyazıt University Affiliated: Yes

Abstract

© 2021,Academy of Accounting and Financial Studies Journal.This paper examines the impact of capital adequacy and corruption on bank risk-taking behaviour in Ghana over the period 2008-2017. Using the system generalized method of moments (GMM) technique; we establish that increasing bank capital has a significant positive effect on banks’ risk-taking. This finding supports the “regulatory hypothesis”. In addition, the results show that corruption induces bank risk-taking, thus favoring the “sand the wheels” view in the corruption-development nexus. Based on the findings, we discuss relevant policy implications for regulators and bank managers.