Ferdowsi University of Mashhad Iranian Journal of Accounting, Auditing and Finance 2717-4131 10 3 2026 08 01 Macroprudential Policy and the Risk Exposure of Commercial Banks 79 93 47852 10.22067/ijaaf.2026.47852.1599 EN Nafiseh Keshtgar Faculty of Literature and Humanities, University of Birjand, Birjand, Iran 0009-0002-9938-6654 Seyed Hossein Mirjalili Institute for Humanities and Cultural Studies, Tehran, Iran 0009-0006-7164-8236 Journal Article 2025 10 08 This paper evaluates the effectiveness of macroprudential policy in reducing commercial banks' risk exposure in Iran. In this study, an empirical model is developed using dynamic panel data techniques and the generalized method of moments (GMM) estimator to examine the impact of macroprudential policy on the risk-taking behavior of Iranian banks during the period 2010-2024. The analysis evaluates the potential effects of four macroprudential instruments aligned with policy objectives: the loan-to-income ratio (LTI), the loan-to-deposit ratio (LTD), the leverage ratio (LVR), and liquidity requirements (LIQ). As a result of stronger macroprudential oversight, commercial banks are significantly less likely to take on risk. In the context of financial sanctions and Iran’s unique economic environment, macroprudential tools remain highly effective in mitigating banking risks. As such, LTD instruments have a time lag, whereas LVR instruments have an immediate impact on risk. Additionally, no single instrument is more effective than the composite macroprudential index at reducing risk-taking. A more secure, less vulnerable banking system in Iran is possible through macroprudential policies, as the results show. https://ijaaf.um.ac.ir/article_47852_a283fe64e2fbe434793656a8e2f25fb3.pdf