Dimensions of liquidity and their factors in the Slovenian banking sector

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

No 2015-55, MENDELU Working Papers in Business and Economics from Mendel University in Brno, Faculty of Business and Economics

Abstract: The present article focuses on the internal factors which have potential influence on the liquidity of the Slovenian banking sector. This paper uses multiple dependent variables, encompassing different views on liquidity. These include the creation of liquidity, its outflow, net change and total reallocation, determined on the basis of a specific method of liquidity measurement. The chosen independent variables include various items of internal character such as loans, deposits, profit, capital and the size of the bank. Robust regression analyses are performed. The results indicate that internal factors have the greatest influence on the creation of liquidity, where almost all the variables considered were significant. A significant item which played a role in multiple dimensions of liquidity was the value of loans and the size of the bank (total assets). The models have shown that any given factor only has an influence on the creation of liquidity without influencing its outflow and vice versa. Thus, when looking for determinants only for the creation or only for the outflow of liquidity, the results need not necessarily comprehensively show the influence of the given factors, and can lead to erroneous conclusions. It is therefore suitable to include multiple views on the value of liquidity, since the influence of a factor can be more dominant in a different dimension of liquidity.

Keywords: Slovenian banking sector; dimension of liquidity; liquidity determinants; internal factors (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Pages: 19
Date: 2015-09
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