EXIGÊNCIA MÍNIMA DE CAPITAL E RENTABILIDADE: UMA ANÁLISE EMPÍRICA DOS BANCOS BRASILEIROS

Abstract

The banking system consists of a very regulated segment of the economy, and one of the measures imposed by the supervising authorities as control is the requirement of  minimum capital. One of the ways found to offer more protection to customers and to financial markets as a whole is to establish a minimum regulatory capital level linked to all risk-weighted on-balance-sheet assets, which is a tool to avoid unusual risk exposure. Therefore, capital in financial institutions is a mechanism of protection against bankruptcy risk, and since 1995, when the Basel agreement was implemented in Brazil, Brazilian banks have to hold a risk-based capital ratio, which consists of a minimum equity compatible with the degree of risk-weighted on-balance-sheet assets. This paper has as a main objective to examine if there is a relationship between capital requirements and profitability in Brazilian banks, and to measure it, with the purpose to contribute as an analysis of the current situation of financial institutions and the current capital regulatory requirements. It is an empirical research that try to raise exploratory indications, through correlations degrees, measured by using panel data as estimation. International literature that explores the impacts of capital requirements in banks presents different conclusions and in some cases presents even not conclusive results. The results that were found in this paper, which was based in a sample of Brazilian banks, did not show any significant relationship between profitability and risk-based capital ratio, which is known in Brazil as Basel Index. Some issues are suggested to justify the results achieved, such as the fact that banks have a preference for assets with less risks, as, for example, government bonds, capital arbitrage, available mainly as a consequence of the risk imposed to active operations, and the how easy it is for banks to hold the minimum capital requirement adopted in Brazil, which can be confirmed by observed high margins of availability.