Application of panel data analysis to determine the role of macroeconomic variables on banks' risks

Investment in and allocating investment resources to business activities is done through financial market and banking credit market is part of this market. The most role of banks in financial market is giving credit to customers. In this matter the capital adequacy assessment and credit risk are important and their control is considered as one of the key effective factors in bank operation and plays a major role in banks and financial institutes’ stability. So, the aim is determining the effect of macroeconomic variables (GDP, liquidity, inflation rate and exchange rate) on Capital adequacy, liquidity risk and credit risk. The results showed that macroeconomic variables have a significant effect on banking risks.