The role of market risks through interest rate fluctuations on capital adequacy in accordance with Basel III requirements for banking supervision. A study of a sample of private Iraqi banks for the period (2008-2020)
DOI:
https://doi.org/10.36325/ghjec.v18i3.13974Keywords:
Interest Rate, Risk, , Basel (III)Abstract
The study aims to identify the importance of market risk, which represents the amount of potential loss that banks may be exposed to, which has become a tool for measuring and managing control over the market risk facing the bank, since the ultimate goal of banks is to increase profitability and reduce losses to which they are exposed. This study has been linked to the bank’s capital adequacy in accordance with the requirements of the Basel Committee (III). The study relied, in its practical part, on nine indicators, three independent indicators, and six on a set of reports and financial statements for the banks. The study sample listed in the Iraq Stock Exchange for the period (2008-2020) included (8) banks. A set of financial and statistical measures represented in financial equations have been used, and the study reached a set of conclusions, the most important of which is the existence of an effect between market risks in the Basel Committee (III), and that capital adequacy rates in Iraqi private banks exceed the minimum established in the Basel Committee Agreement (III) (10.5%) and even more than the instructions of the Central Bank of Iraq, amounting to (12%), and the study presented a set of recommendations, the most important of which is the need for the management of banks to pay attention to studying market risks because it may expose the bank to large losses that cannot be controlled and the extent of the impact of these risks on the solvency of capital banker.
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Copyright (c) 2022 Reda Saheb Abu Hamad Al Ali, Haider Jaafar Abdul Hassan
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