International Journal of Academic Research in Economics and Management Sciences

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Determinants of Capital Adequacy in Commercial Banks of Jordan an Empirical Study

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The study aims to identify the most important factors that determine the Capital Adequacy of Commercial Banks of Jordan in Amman Stock Exchange for the period from 2000 - 2008 using Multiple Linear Regression Analysis and the Correlation Coefficient (Pearson Correlation). The study shows the following: 1- There is a statistically significant positive correlation between the degree of capital adequacy in commercial banks and the following independent factors: liquidity risk, and the rate of return on assets. in another hand, there is an inverse relationship with statistical significance between the degree of capital adequacy of commercial banks and factors independent of the following: the rate of return on equity and interest rate risk. 2 - There is an inverse relationship is not statistically significant between the degree of capital adequacy in commercial banks and factors independent of the following: capital risk, credit risk, and the rate of force-revenue. As shown by the results of the study that the independent variables combined with a relatively high effect on the dependent variable and the changes that occur within, as the percentage of the interpretation of the independent variables of the dependent variable reached approximately 61%.