Basel III, And Banking Risk; Do Basel III Factors Could Predict the Risk of Middle-Eastern Countries?

Abstract

The research is financed by the Nation Natural Science Foundation of China under number 71173060.

Abstract

The global financial crisis in 2008 shows that the successive agreements Basel I, and II failed to stop the global financial collapse. Therefore, this research tries to answer the study question that; can Basel III enhancement give the banking sectors stability? Our data includes 324 listed from the largest banks across Middle East. Results from PLS-SEM analyses demonstrate bank risk is positive relationship related to charter value, information systems and Internal/External control systems. We find negative relationship among bank risk and market discipline. Following our finding, the result shows there is no relationship between bank risk and bank capital and the results suggest that Charter Value is the most important predictor of bank risk.

Keywords: Basel III, Bank Risk, Bank capital, charter value, information system, control system, market discipline, Middle East.