Impact of Bank Activity and Funding Strategies on Liquidity Management: International Evidence

Yu-Li Huang and Kun-Li Lin

Chapter 81 in Handbook of Investment Analysis, Portfolio Management, and Financial Derivatives:In 4 Volumes, 2024, pp 2565-2600 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This study examines the implications of a bank’s activity mix and funding strategy for its liquidity management as defined in the Basel III accords or when they create more liquidity as measured by Berger and Bouwman (2009). Using an international sample of 624 banks in 65 countries, we find that, at low levels of noninterest income and nondeposit funding, there could be some risk diversification benefits in increasing these shares; however, at higher levels of noninterest income and nondeposit funding shares, additional increases result in higher illiquidity. Finally, better accounting disclosure will improve the effect on bank liquidity by both bank’s activity mix and funding strategy, but at the same time, they worsen the bank liquidity by stricter capital stringency and more market power.

Keywords: Financial Accounting; Financial Auditing; Mutual Funds; Hedge Funds; Asset Pricing; Options; Portfolio Analysis; Risk Management; Investment Analysis; Momentum Analysis; Behavior Analysis; Futures; Index Futures; CDCs; Financial Econometrics; Statistics; Financial Derivatives; Financial Accounting (search for similar items in EconPapers)
JEL-codes: G1 G11 G12 G3 M41 M42 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789811269943_0081 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789811269943_0081 (text/html)
Ebook Access is available upon purchase.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789811269943_0081

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().