The financial system has seen substantial changes in the recent past when compared to the previous decade.Since the last decades,the banking sector has undergone several rounds of reforms,the purpose of which is to improve efficiency,increase institutional quality,and create a more stable environment in the banking industry.Banking is a highly regulated industry,and one would expect informal institutions such as national culture not to influence management decisions.However,it seems that bank managers but also bank customers are susceptible to cultural biases making their influence on financial stability,deposit and profitability levels statistically and economically significant.Therefore,the objectives of this dissertation are to examine the relationship between the bank regulations and financial stability with the moderating variable of institutional quality;to analyze the effect of interactive term of national culture and bank regulation on the financial stability across the globe and to examine the impact of concentration on the financial stability across the countries.The sample of this study contains banks from the developed and developing countries across the different regions for a time period of 2000 to 2017.The financial globalization comes with possible options and risks.The potential benefits contain a worldwide,more proficient distribution of capital and better risk-sharing.The specialized technologies,competence,and financial abilities are imported.According to the theoretical relationship,the financial institutions offer and protect the freedom of expression,new ideas relating to the regulations Basel III accord,and their financial features.All of these aspects strengthen trust,build a healthy relationship,sharing thoughts,which are essential to enhance the financial stability position in the long run.The findings suggest that the strict bank regulation heighten financial stability.We document that political stability strengthens the effect of bank activity restrictions and capital regulation on financial stability.The positive influence of private monitoring and deposit insurance on financial stability subdues when there is a lack of institutional quality.We also applied different robustness tests,which further endorse our main results.Further,we find that the effect of bank regulation depends on strong institutions,which mitigate the risk factor.The results also explain that three dimensions of national culture（uncertainty avoidance,individualism,and power distance）have significant direct effects on bank risktaking.Specifically,findings suggest that bank risk-taking is significantly higher in high individualism,low uncertainty-avoidance,and low power distance countries.However,bank concentration is significantly positively related to the NPL ratio,indicating that banks in the more concentrated market face a higher risk.And the concentration ratio is negatively associated with the Z-score.These findings suggest that banks are more stable in a less competitive and lower concentrated environment.This dissertation not only exhibits the effects regarding the corporate bank strategies of financial stability but also contributes to the debate on the applicable different banking regulations.Specifically,the regulatory authorities should encourage better institutional quality and culture to the developing countries.The stronger framework of banking regulatory might help to enhance the governance of banks in developing countries.Similarly,in the equity markets,the lack of an effective governance system can breed incompetent practices such as insider trading that benefit at the expense of the other stakeholders.Therefore,the main thing is to enhance the adequate regulatory framework and governance system.Overall,the results suggest that a critical component of financial stability is good governance and institutions.