ASSESING THE DETERMINANTS OF BANK LIQUIDITY. CASE STUDY ROMANIAN BANKING SYSTEM

Florin-Alexandru Luca and Irina Raluca BUSUIOC Witowschi
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Irina Raluca BUSUIOC Witowschi: Gheorghe Asachi Technical University of Iasi, Economics and Marketing

Management Intercultural, 2016, issue 35, 67-73

Abstract: The financial crisis has highlighted the importance of liquidity risk for the banking system. Therefore, this study focuses on identifing the determinants of liquidity of Romanian banks. The data cover the period from 2006 to 2013 and take into account only bank-specific factors. The empirical study was applied on 16 Romanian banks and based on previous studies and uses different liquidity ratios, encompassing different points of view on liquidity. Regarding the explanatory variables considered in this analysis, they include various items of internal character concerning: capital adequacy, asset quality, profitability, efficiency of financial intermediation and the size of the banks. The results of our regression analysis indicate that bank liquidity is positively related to capital adequacy of banks and bank profitability and negatively related to the rate of non-performing loans, net interest margin and the size of the bank.

Keywords: Liquidity risk; Liquidity; Determinants of liquidity; Romanian banking system; Specific factors Banking (search for similar items in EconPapers)
JEL-codes: C33 G21 G32 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:cmj:interc:y:2016:i:35:p:67-73

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