Determinants of the Slovak bank liquidity flows

Jana Lastuvkova ()
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Jana Lastuvkova: Department of Finance, Faculty of Business and Economics, Mendel University in Brno

No 2015-51, MENDELU Working Papers in Business and Economics from Mendel University in Brno, Faculty of Business and Economics

Abstract: This paper discusses the possible determinants of liquidity flows in the Slovak banking sector. By these flows it is meant the outflow, the net changes and the total value of the liquidity. The flows are obtained according to a specific method of measuring liquidity risk – method of gross liquidity flows. Determinants are evaluated for size groups of the Slovak banking sector conducting panel regressions. Among the factors, there are involved macroeconomic factors, as well as, factors on the level of the market and individual banks, to cover all levels of determinants influencing bank liquidity. The regressions performed have shown that the factors may not only affect liquidity creation, often investigated by other authors, but also its outflow and net changes. From the results, it is also obvious, that banks reflect external environment, as well as, internal characteristics. It seems that Slovak banks create liquidity reserves during favourable economic development and are forced to use them in the time of crisis. On the other hand, for the final value of liquidity, which is a cumulative result of individual flows for more periods, it is more important for banks to reflect the internal factors to adjust the liquidity value.

Keywords: Slovak banking sector; measurement of the bank liquidity; liquidity flows; liquidity determinants (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Pages: 15
Date: 2015-03
New Economics Papers: this item is included in nep-ban
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