International Journal of Management and Commerce

International Journal of Management and Commerce

Online ISSN: 2664-6854
Print ISSN: 2664-6846

International Journal of Management and Commerce
Online and Print Journal   |   Indexed Journal   |   Refereed Journal   |   Peer Reviewed Journal
International Journal of Management and Commerce
2019, Vol. 1, Issue 3
International regulatory capital requirements; An effective tool for market and operational risk management in Banks; The Nigerian perspective

Dr. SLC Adamgbo, Dr. JI Kenn-Ndubuisi

This study examines the effectiveness of International Regulatory Capital Requirements in managing operational and market risk in banks. The study is aimed at finding out whether higher international regulatory capital provisions such as Basel III will effectively ameliorate risk in banks, to x-rayed how banks can enhance their risk management activities to cushion loss and failure. Our model specified approaches for computing risk-weighted assets for operational and market risk for the purpose of determining the effectiveness of international regulatory capital. In carrying out this study, the time series data of fifteen quoted Commercial banks operating in Nigeria were obtained. The study adopts the quasi-experimental research design, as we estimate the data using the multiple regression technique. Series of statistical test are carried out at different stages to achieve the study objectives. Our findings unveil that there exists a statistical short and long run negative equilibrium relationship between operational risk, market risk and higher international regulatory capital requirements. Our results confirm that stricter capital like Basel III international regulatory capital is strong weigh against OPR and MKR among Nigeria Commercial Banks. A causal bidirectional link was established the studied variables. This suggests that higher capital standards are an effective risk ameliorating mechanism that can salvage banks from eminent loss and failure. Hence we recommend the full implementation of Basel III capital provisions in the Nigeria banking scene.
Pages : 27-34 | 229 Views | 103 Downloads
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