Interrelationship among Liquidity, Regulatory Capital and Profitability- A Study on Indian Banks
| Autor: | Purna Chandra Padhan, Sudipa Roy, Arun Kr Misra, Molla Ramizur Rahman |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2019 |
| Předmět: |
Bank liquidity
Economics and Econometrics regulatory capital ComputingMethodologies_SIMULATIONANDMODELING Financial system GeneralLiterature_MISCELLANEOUS panel data lcsh:Finance lcsh:HG1-9999 0502 economics and business Capital requirement ddc:330 2SLS 050207 economics ComputingMethodologies_COMPUTERGRAPHICS 050208 finance lcsh:Economic theory. Demography 05 social sciences bank liquidity Market liquidity lcsh:HB1-3840 bank profitability Profitability index Business 2sls Finance Panel data |
| Zdroj: | Cogent Economics & Finance, Vol 7, Iss 1 (2019) |
| Popis: | Liquidity is the ability of a bank to fund assets and meet obligations, as they become due, at reasonable costs. Technological and financial innovations have impacted the management of liquidity in banks. Declining ability to rely on core deposits, increased reliance on capital markets and recent turmoil in financial markets have created new challenges for banks in managing liquidity. The current study has discussed theories, indicators, factors influencing bank liquidity, and its implications on bank’s capital and profitability. It has empirically analyzed the determinants of liquidity through Arellano-Bond estimates and studied the interrelationship of liquidity, regulatory capital, and profitability through 2-SLS system equations. It has found that bank size, profitability, leverage, net interest margin, CRAR, gross non-performing loans, and Central Bank Policy Rate are the significant determinants of banks’ liquidity. The interactive effects among liquidity, profitability, and regulatory capital convey that banks can be more liquid with less profit, but less risky with more liquidity. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|