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Assesing The Determinants Of Bank Liquidity. Case Study Romanian Banking System

Author

Listed:
  • Florin Alexandru LUCA

    (Gheorghe Asachi Technical University of Iasi, Economics and Marketing)

  • Irina Raluca BUSUIOC WITOWSCHI

    (Gheorghe Asachi Technical University of Iasi, Economics and Marketing)

Abstract

The financial crisis has highlighted the importance of liquidity risk for the banking system. Therefore, this study focuses on identifing the determinants of liquidity of Romanian banks. The data cover the period from 2006 to 2013 and take into account only bank-specific factors. The empirical study was applied on 16 Romanian banks and based on previous studies and uses different liquidity ratios, encompassing different points of view on liquidity. Regarding the explanatory variables considered in this analysis, they include various items of internal character concerning: capital adequacy, asset quality, profitability, efficiency of financial intermediation and the size of the banks. The results of our regression analysis indicate that bank liquidity is positively related to capital adequacy of banks and bank profitability and negatively related to the rate of non-performing loans, net interest margin and the size of the bank.

Suggested Citation

  • Florin Alexandru LUCA & Irina Raluca BUSUIOC WITOWSCHI, 2016. "Assesing The Determinants Of Bank Liquidity. Case Study Romanian Banking System," Management Intercultural, Romanian Foundation for Business Intelligence, Editorial Department, issue 35, pages 67-73, June.
    • Handle: RePEc:cmj:interc:y:2016:i:35:p:67-73
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    More about this item

    Keywords

    Liquidity risk; Liquidity; Determinants of liquidity; Romanian banking system; Specific factors Banking;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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