Author:
Abbas Faisal,Batool Dr. Noshaba,Sulehri Fiaz Ahmad
Abstract
This study aims to explore investment, financial, and trade freedom impact on banks’ risk-taking. A unique dataset of large commercial banks of the USA covering the period 2002-2018 is used. The findings prove that financial freedom reduces the bank’s risk-taking whereas investment and trade freedom increase the risk-taking of large commercial banks in the observed period. The behavior of risk-taking due to financial, trade and investment freedom of under-capitalized and low-liquid banks seems to be marginally less impacted as compared to well-capitalized and high-liquid banks. The findings are robust using loan loss reserves as a risk measure and subclassification of a sample. The results suggest that the intervention of the government is decisive in developing the degree of economic freedom for the stability of the financial system.
Publisher
Editorial Universidad de Almeria
Subject
Economics and Econometrics
Cited by
3 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献