Search

According to Ball's principles, the most important weakness and shortcoming in the banking sector is the lack of financial resources and lending by banks to other economic sectors. Banks need liquidity to cover fluctuations and expected or unanticipated changes in balance sheet items, as well as to attract new resources for allocation and as a result to earn income. In this regard, in this research, the asymmetric effects of banking monetary law requirements on lending and financial stability of banks admitted to the Tehran Stock Exchange have been investigated. For this purpose, the data of 19 selected banks and financial institutions were used during the period of 2012-2020. The findings of the research showed that the banking monetary law and capital requirements had negative and significant effects on bank lending. It was also observed that the banking monetary law and capital requirements had positive and significant effects on the financial stability of banks. Finally, it was observed that there is a symmetrical convergence relationship between lending power and banking stability with capital requirements and banking monetary law. [ABSTRACT FROM AUTHOR]

With the application of the two-tier capital agreement and the introduction of the three-tier capital agreement, the discussion of the role of banks’ capital in the monetary transfer mechanism and banks’ lending decisions has become more important. In this regard, in this research, the effect of the legal requirements of the Basel III Agreement on the lending power and financial stability of the banking sector in Iran has been investigated using the system of simultaneous equations. For this purpose, the data from 19 selected banks and financial institutions were used during the period of 2011-2019. The findings of the research showed that the legal requirements of Basel III had negative and significant effects on bank lending. It was also observed that the legal requirements of Basel III had positive and significant effects on the financial stability of banks. [ABSTRACT FROM AUTHOR]