Faculty of Business Economics and Entrepreneurship International Review (2017 No.1-2) 99 PART III. INDUSTRY ,FINANCE ,TRADE AND TOURISM ISSUES ORIGINAL RESEARCH PAPERS The development of capital market and bank risk: The Case of Iran Babak Jamshidi Navid 26 , Parvane Shabantaheri 27 ABSTRACT This paper is an attempt to investigate about relationship between the development of capital market and bank risk in Tehran Stock Exchange. Three hypotheses were presented in this research. This is a descriptive- correlative research. Multi-variable regression was used in this research. According to results of this research, there is a significant relationship between the development of capital market and bank risk. Additionally, there is significant relationship between Beta, income variety, and market value and capital market development. Also, due to effective role of bank in Iran economy bridge market, it is possible to point out its effective role in capital market. Results of this research confirm this claim. It is suggested to stakeholders and users of banking information and capital market to pay attention to bank risks regard their decision-making. KEY WORDS: Development Of Capital Markets, Risk, Beta, Income Diversification, Market Value JEL: D53, E52 UDC: 005.334:336.76(55) COBISS.SR-ID 238312460 26 Department of accounting, Kermanshah Branch, Islamic Azad University, Kermanshah ,e-mail:Iran. Jamshidinavid@iauksh.ac.ir 27 Department of Financial Management, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran.