Template-Type: ReDIF-Article 1.0
Author-Name: Shayesteh Varedi
Author-Name-First: Shayesteh
Author-Name-Last: Varedi
Author-Email: sh_varedi@yahoo.com
Author-Workplace-Name: Assistant professor, Department of Economics, Qaemshahr Branch, Islamic Azad University, Qaemshahr, Iran
Author-Name: Elham Gholami
Author-Name-First: Elham
Author-Name-Last: Gholami
Author-Email: elham_gholami4@yahoo.com
Author-Workplace-Name: Ph.D, Department of Economics, Economic consultant of Shahr Bank, Tehran, Iran.
Title: The Effect of the Banking Business Model on Financial Stability of Banks in Iran
Abstract: This study investigates the effect of the business model on financial stability of banks operating in Iran. For this purpose, based on the economic approach of the banking business model, two financing structures (ratio of non-deposit financing to total liabilities) and income structure (ratio of non-interest income to total operating income) are used to measure the business model. Next, the impact of these measures and other explanatory variables on the stability of banks (standard deviation of asset returns) was estimated by a multivariate regression model using random effects model and the panel data of 22 banks (17 private banks and 5 state banks) for the period 2010-2016. The results show that an increase in the ratio of non-interest income raises the bank stability index. Therefore, the more banks rely on non-interest income, the more stable they will operate in terms of profitability.
Classification-JEL: JEL
Keywords: banking stability; business model; non-interest income; non-deposit financing
Journal: International Journal of Resistive Economics
Pages: 57-66
Volume: 6
Issue: 1
Year: 2018
Month: January
File-URL: https://www.oajre.ir/article_174279_0327dfc9375ef2fbdc0309320873013b.pdf
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File-Function: Full text
File-URL: https://www.oajre.ir/article_174279.html
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Handle: RePEc:trd:journl:174279