Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264425 
Year of Publication: 
2022
Citation: 
[Journal:] The Journal of Entrepreneurial Finance (JEF) [ISSN:] 1551-9570 [Volume:] 24 [Issue:] 2 [Article No.:] 8 [Publisher:] The Academy of Entrepreneurial Finance (AEF) [Place:] Los Angeles, CA [Year:] 2022 [Pages:] 1-22
Publisher: 
The Academy of Entrepreneurial Finance (AEF), Los Angeles, CA
Abstract: 
Theoretical foundations in banks' response to capital settlement suggest that the systems proposed by Basel are not sound. It is conceivable that regulators will consider alternative approaches to enhance the safety and soundness of the banking system. The regulation includes several decrees and ratios; the areas of interest encompassing the areas are subject to principal component analysis (PCA).The paper aims to present a regulatory framework based on balance sheet ratios, such as Capital requirements (equity ratio; Tier 1 ratio; Total Equity/Net Loans; Total Equity/Deposits); for liquidity needs (liquidity/deposits; liquidity/total assets; liquidity/deposits and loans, and net loans/total assets); for leverage requirements (total liabilities/total assets; total assets/equity; and total liabilities/equity); also banking restriction index; Official supervision index; Private surveillance index, finally global index of regulations and supervision. Besides, it performs a PCA analysis on a set of 13 financial ratios to exploit and compare the financial characteristics of 239 banks (175 Conventional and 64 Islamic commercial banks) in the MENA region over a 2004-2015 period. This gives the main indices EXIGCP, EXIGLIQ, LEVCP, and LEVP.
Subjects: 
Banks
Regulation
Basel I,II,III
Principal Component Analysis
MENA
JEL: 
G18
G21
G28
C38
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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