As a means to economic growth and development, banking is one of the most heavily regulated industries due to externalities from banking failures. Banking regulation aims to maintain safety and soundness in order to protect depositors' losses, which may result from insolvency and/or illiquidity. Banking crises have induced policy makers to place emphasis on protective regulatory policy. Therefore, banking policy focuses on the regulation of capital, which is a centerpiece of the government intervention because it can affect risk-taking by bank ...