 Do non-traditional banking activities reduce bank liquidity creation? Evidence from VietnamVan Dan Dang Research in International Business and Finance, 2020, vol. 54, issue C Abstract: The study analyzes the impact of engaging in non-traditional banking activities on bank liquidity creation. This strand of research has almost gone unnoticed by academics so far. Based on a dataset of Vietnamese commercial banks from 2007 to 2018, we document that the liquidity creation function of banks decreases with the income from non-traditional banking segments. This impact is observed in both on- and off-balance sheets across multiple robustness tests of the static and dynamic panels regressed by the ordinary least squares method and the generalized method of moments. Further decomposing the non-interest income sources, we find that banks that engage more in non-traditional activities for fees and commissions tend to reduce the liquidity creation more compared to other counterparts. The findings offer insightful implications for regulatory agencies and bank managers in the determination of liquidity creation behavior in emerging markets. Keywords: Emerging market; Income diversification; Liquidity creation; Non-traditional banking; Vietnam (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:54:y:2020:i:c:s0275531919309092 DOI: 10.1016/j.ribaf.2020.101257 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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