Relationship between Macroeconomic Indicators and Capital Markets Performance in selected Southeastern European Countries

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

The Impact of Macroeconomic Factors on Banks’ Liquidity from 2008 to 2020

“…A weak liquidity position threatens a bank's solvency and profitability and makes it unsafe and unhealthy. The degree of liquidity constraint depends on the actual value of money, which, in turn, depends on the inflation rate (Adelopo, Lloydking, & Tauringana, 2018;Dodig, 2020;Semenova & Vitkova, 2019). Inflation reduces the actual value of money and thus makes liquidity constraints mandatory.…”