Liquidity Determinants of the Selected Banking Sectors and their Size Groups

Abstract

The article focuses on the factors aff ecting the liquidity of selected bank sectors, as well as their size groups, using panel regression analysis. For higher complexity of the results, multiple dependent variables are used: liquidity creation, outfl ow and net change. The values are calculated based on the specifi c method of liquidity risk measurement -gross liquidity fl ows. The results indicate both multiple eff ects of some factors on the given variables, as well as isolated infl uence of factors on a single liquidity form or size group. Thus, when looking for determinants using just one form of liquidity, such as creation, the results need not necessarily comprehensively show the infl uence of the given factors, and can lead to erroneous conclusions. The results also point to the diff ering behaviours of the size groups and their diff erent sensitivity on the factors; smaller banks have shown higher sensitivity on macroeconomic variables. Higher fl exibility in regulation could lead to higher optimization.

Stokvel saving and banking sector liquidity in South Africa: cointegration and short-run dynamics

“…BSL was used as the third proxy for BSD. In this study, BSL is denoted by BS liquid liabilities as a percentage of GDP (Singh and Sharma, 2016;Laštůvková, 2016;Marozva, 2013;Marozva, 2015). Banking sector liquidity is expected to have a direct relationship with stokvel savings.…”