<p>This study develops and estimates both two-step system generalized method of moments (2GMM) and three-stage least squares (3SLS) for dynamic panels to examine the simultaneous relationship between bank’s capital regulation and risk-taking concerning the impact of ownership structure and ownership stability in the governance framework. The study has used an unbalanced panel dataset of 32 commercial banks from Bangladesh over the most recent period between 2000 and 2022. The result finds that higher risk persuades abating capital ratio. Besides, there is a U-shaped relationship demonstrated between capital regulation, risk, and ownership structure. It finds that Islamic banks are as capable as private banks of generating capital ratio, lessening credit risk with better-driven Shari’ah principles and corporate governance over conventional and other peers. Among the diverse ownership structures, institutional ownership holds benefits for the banks irrespective of terms. Impressively corporate governance and Shari’ah supervision jointly glitter rather than alone. It is found that large banks are less capitalized and high risky than small banks which conveys “too big to fail” principle. In addition, this study also highlights the distinctive role of Islamic banking principles in guiding risk and capital management strategies, illustrating how adherence to Shari'ah law not only aligns with traditional banking regulations but also fosters a unique approach to financial stability and ethical governance.</p>