The Role of Banking Crisis in the Effect of Income Structure on Risk in the Iranian Banking Industry

Document Type : Original Article

Authors

1 Assistant Professor of Economics at University of Bojnord,Bojnord, Iran

2 M.A in Economics at University of Bojnord,Bojnord, Iran

Abstract

TToday, with the globalization of the economy and the increased competition between the banks, the profits of traditional banking activities have diminished, and their risk has been on rise. Thus, banks should adopt more efficient risk management methods. In the last three decades, Iranian economy has faced many fluctuations in macroeconomic areas, e.g. the banking industry. The main goal of the current study is to examine the role of banking crisis in the effect of Income diversity on risk of banking industry using panel econometric method) EGLS .(For this purpose, 8 accepted banks in the Tehran Stock Exchange were evaluated as a research statistical population during 2005-2018. The results show that an increase in the share of Non-interest income (income diversity) in the time of banking crisis does not have a significant effect on the banking stability. Another finding of the study suggests that there is a negative significant relationship between the index of concentration during the crisis and the stability of the banking industry. Also, there is a positive significant relationship between the size of the bank, the loan ratio, and the capital adequacy index during the crisis with banking risk.

Keywords