Digital finance development and bank liquidity creation

Jing Hao, Mengzu Peng and Wenjia He

International Review of Financial Analysis, 2023, vol. 90, issue C

Abstract: This paper explores the impact of digital finance development on bank liquidity creation. Using 118 banks in China from 2011 to 2020, we find that digital finance development has a negative impact on bank liquidity creation. The inhibitory effect mainly exists in on-balance sheet and asset-side liquidity creation and has less impact on off-balance sheet liquidity creation. This negative impact is more pronounced in large banks, national banks, and banks in the western region in China. The bank risk-taking level mediates the relationship between digital finance development and bank liquidity creation.

Keywords: Digital finance development; Bank liquidity creation; Fintech (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (26)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:90:y:2023:i:c:s1057521923003551

DOI: 10.1016/j.irfa.2023.102839

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