Analysis of the impact of bank digitization process on liquidity creation and risk-taking

Lu Wang, Xinli Zhao and Ling Wan

Finance Research Letters, 2025, vol. 79, issue C

Abstract: This article examines the impact of digital transformation on business operations of 162 commercial banks in China, sampled over the period 2012–2022, with a particular focus on liquidity creation. The findings indicate that the process of digital transformation within these banks results in a reduction in liquidity creation. This outcome is largely due to the influence of management digitalization, as digital transformation effectively curbs liquidity creation by decreasing banks' willingness to take risks.

Keywords: Bank digital transformation; Liquidity creation; Risk-taking (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325004970

DOI: 10.1016/j.frl.2025.107234

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