Dimensions of bank capital regulation and integration: An analysis of the effects and determinants of capital adequacy of ASEAN5

Date of Publication


Document Type

Master's Thesis

Degree Name

Master of Science in Computational Finance


Ramon V. Del Rosario College of Business


Financial Management Department

Thesis Adviser

Rene B. Betita

Defense Panel Chair

Edwin E. Valeroso

Defense Panel Member

Michael G. Munsayac
Earl Anthony Carlos T. Malvar
Brian C. Gozun


Effective regulation remains a key challenge to supervisory authorities, as they seek to find resilience in the financial system amid the banking industry's ever-changing landscape. Correspondingly, revisions to the risk-based capital adequacy framework has influenced commercial banks strategic asset allocation, to maintain a balance between maximizing capital adequacy ratio while keeping lending growth and profitability intact. The global financial crisis however, showed that regulatory lapses continue to persist. The interconnectedness of the financial system likewise played a major role during the crisis, causing spillovers from one country to another. To better understand linkages of banking, regulation and integration, this paper provides an analysis of the effects of capital controls to the performance of top commercial banks in selected ASEAN countries. Additionally, the study also identifies the key determinants of capital adequacy ratios to guide bankers and regulators in effective capital management. Analysis of panel data regression revealed significant effects of capital adequacy ratios to profitability, asset quality, management quality, liquidity, leverage and deposits. However, results indicate that capital adequacy ratios do not always improve bank performance, but denote a more conservative banking environment. On the other hand, loans and deposits, leverage ratio, interest rate, GDP growth and inflation rate were identified as significant determinants of the capital adequacy ratios. The study recommends the need to incorporate measurement of systemic risk to capture adverse developments in the region. Ultimately, the key is to find the optimal banking environment where risks are mitigated but banks continue to grow and expand operations.

Abstract Format






Accession Number


Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

1 computer disc ; 4 3/4 in.


Banks and banking

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