IDEAS home Printed from https://ideas.repec.org/a/eco/journ3/2019-02-11.html
   My bibliography  Save this article

Determinants of Bank Liquidity in the Middle East Region

Author

Listed:
  • Hani El-Chaarani

    (Faculty of Business Administration, Beirut Arab University, Lebanon)

Abstract

The objective of this study is to examine the determinants of bank liquidity in the Middle East region. It also aims to compare the liquidity levels of banking sectors between Middle Eastern countries. Two different liquidity measures, four bank specific factors and three macroeconomic factors have been manipulated by using the WLS regression on 183 banks from eight different countries during a period of three years (2014, 2015 and 2016). The research employed “loans-to-assets” and “loans-to-deposits” as proxies to measure the bank’s liquidity level. The bank specific factors include assets quality, performance level, capitalization ratio and bank size. The macro economic factors used in this study are economic growth, unemployment and inflation rates. The results indicate that Lebanese banks have the highest level of liquidity whereas Omani banks have the lowest level of liquidity. In addition, the study shows a decreasing of bank liquidity during 2016 in Middle Eastern countries. The additional analysis reveals the significant impacts of economic growth, assets quality, capital level and bank size on liquidity in the banking sector. Finally, the results reveal that larger banks have to monitor their liquidity risks by controlling the level of provided loans and, they recommend central banks keep an eye on equity ratio and non-performing percentage of loans especially during economic growth.

Suggested Citation

  • Hani El-Chaarani, 2019. "Determinants of Bank Liquidity in the Middle East Region," International Review of Management and Marketing, Econjournals, vol. 9(2), pages 64-75.
    • Handle: RePEc:eco:journ3:2019-02-11
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/irmm/article/download/7742/pdf
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/irmm/article/view/7742/pdf
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Hani El-Chaarani & Rebecca Abraham, 2022. "The Impact of Corporate Governance and Political Connectedness on the Financial Performance of Lebanese Banks during the Financial Crisis of 2019–2021," JRFM, MDPI, vol. 15(5), pages 1-18, April.
    2. Sathyamoorthi C. R. & Mogotsinyana Mapharing & Mphoeng Mphoeng & Mashoko Dzimiri, 2020. "Impact of Financial Risk Management Practices on Financial Performance: Evidence from Commercial Banks in Botswana," Applied Finance and Accounting, Redfame publishing, vol. 6(1), pages 25-39, February.
    3. 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.
    4. Jaroslav Mazanec, 2023. "Capital Structure Theory in the Transport Sector: Evidence from Visegrad Group," Mathematics, MDPI, vol. 11(6), pages 1-17, March.
    5. Hani El-Chaarani, 2019. "The Impact of oil Prices on the Financial Performance of Banking Sector in Middle East Region," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 148-156.

    More about this item

    Keywords

    Liquidity; banks; capital structure; performance; economic growth; unemployment; inflation.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

    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:journ3:2019-02-11. 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.

    We have no bibliographic references for this item. You can help adding them by using 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.