the study concludes a positive effect of regulatory pressure on bank capital and bank risk taking. The findings reveal also that banks close to the minimum regulatory capital requirements improve their capital adequacy by increasing their capital and decreasing their risk taking. Furthermore, the results show that economic crisis positively affects bank risk changes, suggesting that banks react to the impact of uncertainty by increasing their risk taking. Finally, the estimations show a positive correlation between banks profitability and increase in capital, indicating that profitable banks can more easily improve their capitalization through retained earnings rather than issuing new securities.