Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Investigating the Impact of Capital Adequacy Ratio and Corruption on Bank Risk-Taking in Ghana

Author(s): Alhassan Bunyaminu, Shani Bashiru, Ibrahim Monipaak Amadu, Ibrahim Nandom Yakubu, Ahmed Jamal Iddrisu

This paper examines the impact of capital adequacy and corruption on bank risktaking behaviour in Ghana over the period 2008-2017. Using the system generalized method of moments (GMM) technique; we establish that increasing bank capital has a significant positive effect on banks’ risk-taking. This finding supports the “regulatory hypothesis”. In addition, the results show that corruption induces bank risk-taking, thus favoring the “sand the wheels” view in the corruption-development nexus. Based on the findings, we discuss relevant policy implications for regulators and bank managers.

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