Abstract

This study examines how the regulation of bank minimum capital base in Nigeria interacts with the bank risk-taking behavior of the bank operators. Adopting the ex-post-facto researchdesign the study presented in this paper ascertained the effect of the regulation of bank capital on bank risk-taking behavior utilizing post financial crises annualreports of quoted banks from years 2009-2013. Simultaneous linear regressions were used to ascertain the behaviour of banks to regulatory capital requirements from time to time. The panel least squares result suggests that risk, size, and interest margin (spread), and capital adequacy relate positively with changes in risk thus implying that an increase in size and capital, increases bank risk taking appetite. Conclusively, therefore, regulation pressure has a negative correlation with capital adequacy and risk taking appetite but does not significantly affect the capital adequacy as well as risk taking appetite of Nigerian banks.

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