The determinants of banking regulation in the MENA region

Theoretical foundations in banks' response to capital settlement suggest that the systems proposed by Basel are not sound. It is conceivable regulators will consider alternative approaches enhance safety and soundness of banking system. The regulation includes several decrees ratios; areas interest encompassing subject principal component analysis (PCA).The paper aims present a regulatory framework based on balance sheet ratios, such as Capital requirements (equity ratio; Tier 1 Total Equity/Net Loans; Equity/Deposits); for liquidity needs (liquidity/deposits; liquidity/total assets; liquidity/deposits loans, net loans/total assets); leverage (total liabilities/total total assets/equity; liabilities/equity); also restriction index; Official supervision Private surveillance index, finally global index regulations supervision. Besides, it performs PCA set 13 financial ratios exploit compare characteristics 239 banks (175 Conventional 64 Islamic commercial banks) MENA region over 2004-2015 period. This gives main indices EXIGCP, EXIGLIQ, LEVCP, LEVP.