IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2015-01-20.html
   My bibliography  Save this article

The Determinants of Bank Liquidity: Case of Tunisia

Author

Listed:
  • Mohamed Aymen Ben Moussa

    (Mediterranean University of Tunis, 14 Rue Mohamed BadraMontplaisir Tunis,Tunisia.)

Abstract

Liquidity is an important variable for the bank and the banking system components. So it is interesting to show its determinants. Thus, we used a sample of 18 banks in Tunisia in for 2000- 2010period. We estimated two measures of liquidity (liquid assets / total assets; total loans / total deposits). Through the method of static panel and method of panel dynamic, we found that (financial performance, capital / total assets, operating costs/ total assets, growth rate of GDP, inflation rate, delayed liquidity) have significant impact on bank liquidity while (size, total loans / total assets, financial costs/ total credits, total deposits / total assets) does not have a significant impact on bank liquidity.

Suggested Citation

  • Mohamed Aymen Ben Moussa, 2015. "The Determinants of Bank Liquidity: Case of Tunisia," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 249-259.
    • Handle: RePEc:eco:journ1:2015-01-20
    as

    Download full text from publisher

    File URL: http://www.econjournals.com/index.php/ijefi/article/view/1036/pdf
    Download Restriction: no
    File URL: http://www.econjournals.com/index.php/ijefi/article/download/1036/pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Irina Bunda & Jean-Baptiste Desquilbet, 2008. "The bank liquidity smile across exchange rate regimes," International Economic Journal, Taylor & Francis Journals, vol. 22(3), pages 361-386.
    2. Juan Pablo Painceira, 2010. "The Role of Banks in the Korean Financial Crisis of 1997: An Interpretation Based on the Financial Instability Hypothesis," Palgrave Macmillan Books, in: Daniela Tavasci & Jan Toporowski (ed.), Minsky, Crisis and Development, chapter 17, pages 302-317, Palgrave Macmillan.
    3. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    4. Koray Alper & Timur Hulagu & Gursu Keles, 2012. "An Empirical Study on Liquidity and Bank Lending," Working Papers 1204, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    5. Lei, Adrian C.H. & Song, Zhuoyun, 2013. "Liquidity creation and bank capital structure in China," Global Finance Journal, Elsevier, vol. 24(3), pages 188-202.
    6. Douglas W. Diamond & Philip H. Dybvig, 2000. "Bank runs, deposit insurance, and liquidity," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 24(Win), pages 14-23.
    7. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    8. Roman Horváth & Jakub Seidler & Laurent Weill, 2014. "Bank Capital and Liquidity Creation: Granger-Causality Evidence," Journal of Financial Services Research, Springer;Western Finance Association, vol. 45(3), pages 341-361, June.
    9. Anil K. Kashyap & Raghuram Rajan & Jeremy C. Stein, 2002. "Banks as Liquidity Providers: An Explanation for the Coexistence of Lending and Deposit‐taking," Journal of Finance, American Finance Association, vol. 57(1), pages 33-73, February.
    10. Joël Bessis, 2009. "Risk Management in Banking," Post-Print hal-00494876, HAL.
    11. Sehrish Gul & Faiza Irshad & Khalid Zaman, 2011. "Factors Affecting Bank Profitability in Pakistan," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 14(39), pages 61-87, March.
    12. Shahchera , Mahshid, 2012. "The Impact of Liquidity on Iranian Bank Profitability," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 7(1), pages 139-160, October.
    13. Mr. Magnus Saxegaard, 2006. "Excess Liquidity and Effectiveness of Monetary Policy: Evidence from Sub-Saharan Africa," IMF Working Papers 2006/115, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ibish Mazreku & Fisnik Morina & Valdrin Misiri & Jonathan V. Spiteri & Simon Grima, 2019. "Exploring the Liquidity Risk Factors in the Balkan Region Banking System," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 91-102.
    2. Seba Mohanty & Jitendra Mahakud, 2021. "Causal Nexus Between Liquidity Creation and Bank Capital Ratio: Evidence from India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 15(2), pages 205-237, May.
    3. Shumaila Meer Perhiar & Changjun Zheng & Probir Kumar Bhowmik, 2020. "Cost and Benefit of Commercial Banks’ Capital Regulations of Australia, Norway, and Pakistan," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 10(1), pages 1-5.
    4. Ahmet KARAKAŞ & Melek ACAR, 2022. "Determinants of liquidity in commercial banks: evidence from the Turkish banking sector," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 14(3), pages 236-268, December.
    5. Fernandes, Gláucia & Mendes, Layla dos Santos & Leite, Rodrigo de Oliveira, 2021. "Cash holdings and profitability of banks in developed and emerging markets," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 880-895.
    6. Ahmed Eltweri & Nedal Sawan & Krayyem Al-Hajaya & Zineb Badri, 2024. "The Influence of Liquidity Risk on Financial Performance: A Study of the UK’s Largest Commercial Banks," JRFM, MDPI, vol. 17(12), pages 1-23, December.
    7. Osama Omar Jaara & Bassam Omar Jaara & Jamal Shamieh & Usama Adnan Fendi, 2017. "Liquidity Risk Exposure in Islamic and Conventional Banks," International Journal of Economics and Financial Issues, Econjournals, vol. 7(6), pages 16-26.
    8. José Carlos Teixeira & Carlos Vieira & Paulo Ferreira, 2021. "The Effects of Government Bonds on Liquidity Risk and Bank Profitability in Cape Verde," IJFS, MDPI, vol. 9(1), pages 1-23, January.
    9. Elma Hasanovic & Tanja Latic, 2017. "The Determinants of Excess Liquidity in the Banking Sector of Bosnia and Herzegovina," IHEID Working Papers 11-2017, Economics Section, The Graduate Institute of International Studies.
    10. Jana Laštůvková, 2016. "Liquidity Determinants of the Selected Banking Sectors and their Size Groups," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 64(3), pages 971-978.
    11. Esra N. Kılcı & Burcu Kıran Baygın, 2019. "Analysis of the Relationship between Real Effective Exchange Rate, Common Equity Tier 1 Ratio and Return on Equity: Evidence from Turkey," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 7(2), pages 319-332, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brooke Alexandra Maeda, 2015. "Flight to Liquidity on the Tokyo Stock Exchange during the 2008 Share Market Crashes," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 790-801.
    2. Seba Mohanty & Jitendra Mahakud, 2021. "Causal Nexus Between Liquidity Creation and Bank Capital Ratio: Evidence from India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 15(2), pages 205-237, May.
    3. Umar Muhammad & Sun Gang, 2016. "Non-performing loans (NPLs), liquidity creation, and moral hazard: Case of Chinese banks," China Finance and Economic Review, De Gruyter, vol. 5(3), pages 51-75, September.
    4. Gupta, Juhi & Kashiramka, Smita & Ly, Kim Cuong & Pham, Ha, 2023. "The interrelationship between bank capital and liquidity creation: A non-linear perspective from the Asia-Pacific region," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 793-820.
    5. Dang, Van Dan & Huynh, Japan, 2022. "Bank funding, market power, and the bank liquidity creation channel of monetary policy," Research in International Business and Finance, Elsevier, vol. 59(C).
    6. Duan, Ying & Niu, Jijun, 2020. "Liquidity creation and bank profitability," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    7. Carmela D’Avino & Eric Girardin & Mimoza Shabani, 2022. "Bank liquidity creation: A new global dataset for developing and emerging countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(2), pages 529-570, May.
    8. Grover, Naina & Sinha, Pankaj, 2019. "Determinants, Persistence and value implications of liquidity creation: An evidence from Indian Banks," MPRA Paper 94280, University Library of Munich, Germany.
    9. Díaz, Violeta & Huang, Ying, 2017. "The role of governance on bank liquidity creation," Journal of Banking & Finance, Elsevier, vol. 77(C), pages 137-156.
    10. Jalali Farahani , Alireza & Sargolzaee , Mostafa & Dehghan Nayeri , Leila & Ghaffari Nejad , Amir Hossein, 2020. "Effects of Capital Raising on Liquidity Creation and Credit in the Banking System of Iran," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 15(1), pages 101-121, January.
    11. Hou, Xiaohui & Li, Shuo & Li, Wanli & Wang, Qing, 2018. "Bank diversification and liquidity creation: Panel Granger-causality evidence from China," Economic Modelling, Elsevier, vol. 71(C), pages 87-98.
    12. Berger, Allen N. & Sedunov, John, 2017. "Bank liquidity creation and real economic output," Journal of Banking & Finance, Elsevier, vol. 81(C), pages 1-19.
    13. Ahmad Sahyouni & Man Wang, 2022. "Bank capital and liquidity creation: evidence from Islamic and conventional MENA banks," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 12(3), pages 291-311.
    14. George Kladakis & Lei Chen & Sotirios K. Bellos, 2022. "Wholesale funding and liquidity creation," Review of Quantitative Finance and Accounting, Springer, vol. 59(4), pages 1501-1524, November.
    15. Lu, Yiming & Wang, Yu, 2023. "Bank liquidity hoarding and bank systemic risk: The moderating effect of economic policy uncertainty," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    16. Kladakis, George & Chen, Lei & Bellos, Sotirios K., 2022. "Bank regulation, supervision and liquidity creation," Journal of International Money and Finance, Elsevier, vol. 124(C).
    17. Guo, Pin & Zhang, Cheng, 2023. "The impact of bank FinTech on liquidity creation: Evidence from China," Research in International Business and Finance, Elsevier, vol. 64(C).
    18. Jeongsim Kim, 2018. "Bank Competition And Financial Stability: Liquidity Risk Perspective," Contemporary Economic Policy, Western Economic Association International, vol. 36(2), pages 337-362, April.
    19. Tran, Vuong Thao & Lin, Chien-Ting & Nguyen, Hoa, 2016. "Liquidity creation, regulatory capital, and bank profitability," International Review of Financial Analysis, Elsevier, vol. 48(C), pages 98-109.
    20. Anas Alaoui Mdaghri & Lahsen Oubdi, 2022. "Bank-Specific and Macroeconomic Determinants of Bank Liquidity Creation: Evidence from MENA Countries," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 11(2), pages 55-76.

    More about this item

    Keywords

    bank; bank liquidity; static panel; Tunisia; dynamic panel;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2015-01-20. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.