Strengthening bank capital and its role in economic activity: "First Abu Dhabi Bank as a case study"

Abstract

This research aims to identify the methods and mechanisms banks use to increase their capital, taking into account modern techniques and their applicability. It also seeks to demonstrate the role of capital size in enhancing financial stability and boosting banks' creditworthiness. The research posits that capital increases can have an indirect impact on economic activity. The findings indicate that bank capital can influence economic growth by reducing banks' incentives to take risks, increasing their reserves against losses, enhancing their resilience to shocks, mitigating recessions, and ultimately stimulating economic growth.