Do board characteristics moderate capital adequacy regulation and bank risk-taking nexus in Sub-Saharan Africa?
Do board characteristics moderate capital adequacy regulation and bank risk-taking nexus in Sub-Saharan Africa?
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Date
2023-04-24
Authors
Asiamah, Sampson
Opoku Appiah,Kingsely
Ebenezer Agyemang Badu
Journal Title
Journal ISSN
Volume Title
Publisher
Asian Journal of Economics and Banking
Abstract
Abstract
Purpose – The purpose of this paper is to examine whether board characteristics moderate the relationship
between capital adequacy regulation and bank risk-taking of universal banks in Sub-Saharan Africa (SSA).
Design/methodology/approach – The paper uses 700 bank-year observations of universal banks in SSA
between 2009 and 2019. The paper further uses the two-step generalized method of moments as the baseline
estimator.
Findings – The paper finds that capital adequacy regulation is positively related to overall bank and liquidity
risks. Nonetheless, capital adequacy regulation increases credit risk in the sampled banks. The paper further
reports that board characteristics individually and significantly moderate the relationship between capital
adequacy regulation and risk-taking.
Practical implications – The findings have implications for regulators of universal banks that board
characteristics matter for capital adequacy regulation to impact risk-taking behavior.
Originality/value – The paper extends the existing literature on the effect of board characteristics on the
capital adequacy regulations and risk-taking behavior nexus of universal banks.
Keywords Capital adequacy, Risk-taking, Universal banks, Sub-Saharan Africa (SSA)
Paper type Research pape
Description
Keywords
Citation
Asiamah, S., Appiah, K. O., & Agyemang Badu, E. (2023). Do board characteristics moderate capital adequacy regulation and bank risk-taking nexus in Sub-Saharan Africa?. Asian Journal of Economics and Banking.