The Effects of Too-Big-to-Fail Periods Banks on Deposits in Government and Private Banks in Iran (Dynamic Panel Data Approach)

Subject Areas : Financial Economics

Hossein Mirzaei ¹ ( Department of Economics and Accounting, Central Tehran Branch, Islamic Azad University, Tehran, Iran )
mehrdad rezaei ² ( Department of Economics and Accounting, Center Tehran Branch, Islamic Azad University, Tehran, Iran )
Javad Salahi ³ ( Department of Economics and Accounting, Center Tehran Branch, Islamic Azad University, Tehran, Iran )
Majid Afshari Rad ⁴ ( Department of Economics and Accounting, Center Tehran Branch, Islamic Azad University, Tehran, Iran )

Received: 2022-06-23 Accepted : 2022-08-27 Published : 2022-11-22

Keywords: Deposits, Duration Model, Keywords: Too-Big-to-Fail Periods, Dynamic Panel Data Approach. JEL Classification: C23:G20:G28,

Abstract :

AbstractIn the wake of recent financial crisis, large banks have been considered as important factors in financial markets in the world, since these banks' failure could affect the whole economy by extending systemic risk. With regard to this issue, when large banks face insolvency or bankruptcy, larger part of economy would be affected, and with the interconnectedness between banks and financial institutions, the effects of large banks' bankruptcy will have greater impact on the real economy. After financial crisis, many studies have concentrated on the failure of TBTF banks, and the role of these banks in the incident of financial crisis. Number of specialists emphasize on bank size and Basel Committee on Banking Supervision regulated by the classification of banks and their systemically important banks. The study of risk among systemically important banks is important to Basel Committee on Banking Supervision. Many studies confirm that larger banks tend to have less capital, less stability and sustainability of resources, and higher risk-taking activities, therefore, larger banks have become fragile in financial markets. Moreover, the other explanatory variables such as inflation and GDP growth have negative and positive effects on deposits volume in Iran respectively. 

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