Investigating the relationship between bank capital and risk-taking.

Thesis Abstract

This research aims to investigate the relationship between bank capital and risk-taking. Bank capital serves as a buffer against unexpected losses and is a key determinant of a bank's ability to absorb risks. However, there is an ongoing debate about the impact of bank capital on risk-taking behavior. The study will examine the theoretical and empirical literature on this relationship and analyze the factors that influence the risk-taking behavior of banks, such as regulatory requirements, market conditions, and corporate governance. It will also consider the potential trade-offs between capital requirements and lending activities. The research findings will provide insights into the complex relationship between bank capital and risk-taking and contribute to the understanding of bank risk management.