Liquidity buffers determinants in GCC’s Islamic banks
Wided Khiari and
Bulletin of Applied Economics, 2020, vol. 7, issue 2, 129-140
The purpose of this paper is to understand determinants of liquidity buffers in the GCC’s Islamic banks. We apply the model of Bonner et al. (2005) on balanced panel data, bank specific data and annual balance sheet data for all reporting banks. The data cover a period of 8 years from 2004 until 2011 for 24 Islamic banks from GCC region that includes mainly Saudi Arabia, United Arab Emirates, Bahrain and Kuwait. Results show that liquidity buffers negatively related to the size of the bank, the capitalization is negatively related to liquidity buffers in Islamic banks in the GCC region and the ratio of deposits is negatively related to liquid assets holding in Islamic banks, but not statistically significant. In addition, we found a positive relationship between the profitability and liquidity buffers in Islamic banks of the GCC region. Finally, we found a different result when it comes to macroeconomic variables. First we noticed a negative impact of the inflation on liquidity buffers and second, a positive significant relationship between GDP real growth and liquidity buffers in Islamic banks in the GCC region. Our findings can serve as a tool for policy makers in the GCC region to adopt sounder strategies of liquidity management.
Keywords: Islamic banking; GCC region; Liquidity Buffers; panel regression (search for similar items in EconPapers)
JEL-codes: G2 C1 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://www.riskmarket.co.uk/bae/journals-articles ... nload=attachment.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:rmk:rmkbae:v:7:y:2020:i:2:p:129-140
Access Statistics for this article
Bulletin of Applied Economics is currently edited by Eleftherios Spyromitros
More articles in Bulletin of Applied Economics from Risk Market Journals
Bibliographic data for series maintained by Eleftherios Spyromitros-Xioufis ().