Application of panel data analysis to determine the role of macroeconomic variables on banks’ risks.

Investment in and allocating investment resources to business activities is done through the financial market and the banking credit market is part of this market. The most role of banks in the financial market is to give credit to customers. In this matter the capital adequacy assessment and credit risk are important and their control is considered as one of the key effective factors in bank operation and plays a major role in banks and financial institutes’ stability. So, the aim is to determine the effect of macroeconomic variables (GDP, liquidity, inflation rate and exchange rate) on Capital adequacy, liquidity risk and credit risk. The results showed that macroeconomic variables have a significant effect on banking risks. [ABSTRACT FROM AUTHOR]