Abstract: The objective of this research is to determine if financial risk does have any effect on the cost of capital of commercial banks in Libya. The study was conducted on 4 commercial banks in Libya which were in operation in Libya for the five years of study from 2014 to 2016, by using unbalanced panel data. The various ratios of these commercial banks were computed from the various data collected from the data extracted from their financial statement for the period. The data was then analyzed using linear regression model to establish if there is any significant relationship of the financial risk and cost of capital of these commercial banks. The finding of the analysis concluded that there is no significant relationship between the financial risk and cost of capital of commercial banks in Libya. There was very minimal effect which is negligible and therefore it was concluded that there is no relationship between the financial risk and cost of capital of commercial banks in Libya.
Keywords: Financial Risk, Cost of Capital, Debt Ratio, Return on Assets, Commercial Banks.
Title: THE IMPACT OF BANKING RISKS ON THE CAPITAL OF COMMERCIAL BANKS IN LIBYA
Author: Azeddin ARAB
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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