Determinants of Bank Liquidity: An Evidence from Pakistan
Author: Sheheryar Khan

Liquidity is a very important variable for all financial sectors, especially banks and the banking system components. So, it is interesting to show its determinants. Thus, this study empirically investigates the determinants of bank liquidity of listed banks of Pakistan by using a sample of 20 listed banks with stock exchange from a population of 37 commercial banks. This study has used an unbalanced annual panel data covering the period 2009-2018. The ratio approach method was used to measure bank liquidity (liquid assets / total assets). The results of the balance fixed-effect model showed that bank size and net interest margin have a statistically significant and negative relationship with bank liquidity, whereas credit risk has a negative but statistically insignificant relationship with bank liquidity. Management efficiency, capital adequacy has a positive and statistically significant relationship with bank liquidity, whereas Profitability and management quality has a positive but statistically insignificant relationship with bank liquidity. The result of this study also reports that the exchange rate has a positive and statistically significant relationship with bank liquidity, whereas monetary policy has a positive but statistically insignificant. The results of this study are important for credit manager, regulators, and academician, in the sense that they can facilitate commercial banks inefficient resource allocation Supervisor:- Dr. Ahmed Fraz Co-Supervisor:- Dr. Arshad Hassan

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Supervisor: Ahmed Fraz
Cosupervisor: Arshad Hassan

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