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The Impact of Regulatory Reforms on Cost Structure, Ownership and Competition in Iran Banking (in Persian)

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  • Vaez, Mohammad

    (Iran)

  • Farhadi Pour, Mohamadreza

    (Iran)

  • Kiani, Amir

    (Iran)

Abstract

In this study we have tried to analyze the impact of financial sector reform on the cost structure characteristics and on the ownership-cost efficiency relationship in Iranian commercial banking system. It also analyzes the impact of reform on dynamics of competition in lending market. Evidence shows that reform focuses on the banking regulation and deregulation. Therefore, deregulation induced competition should in turn translate into incentives for managers to improve efficiency and performance. On the other hand, the aim of prudential re-regulation is to foster stability and minimize excessive risk taking. In this study regulatory reform emphasizes on capital adequacy ratio. Estimation of the models performed by using data from 8 banks ( Meli, Sepah, Maskan, Eghtesadnovin, Parsian, Melat, Tejarat and Saderat) for the period 1380-1389. The results show that the regulatory reform has a positive and significant impact on dynamics of competition in lending market. Our results also suggest that the ownership-cost efficiency relationship is affected by the reform and regulatory reform as well as positive and significant impact on cost structure. Finally, regulatory reform has a positive impact on the efficiency cost within the mentioned period. JEL Classification Codes: E52, E60

Suggested Citation

  • Vaez, Mohammad & Farhadi Pour, Mohamadreza & Kiani, Amir, 2013. "The Impact of Regulatory Reforms on Cost Structure, Ownership and Competition in Iran Banking (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 6(15), pages 51-76, June.
    • Handle: RePEc:mbr:jmbres:v:6:y:2013:i:15:p:51-76
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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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