ARTICLE

IMPACT OF MACROECONOMIC AND BANKSPECIFIC FACTORS ON LIQUIDITY OF COMMERCIAL BANKS IN PAKISTAN

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24 Pages : 269-285

http://dx.doi.org/10.31703/grr.2022(VII-I).24      10.31703/grr.2022(VII-I).24      Published : Mar 2022

Impact of Macroeconomic and Bank-Specific Factors on Liquidity of Commercial Banks in Pakistan

Abstract

    Financial system stability has been gaining crucial consideration on both, national and international levels in terms of structural, institutional and macroeconomic aspects. Money as a medium of exchange and banks as an intermediary cannot be comprehended by visualizing a world without them. It can be observed that old modalities of the banking system have been replaced by many innovations in the new millennium. To evaluate the soundness and steadiness of a banking sector, it is considered imperative to associate the banking system with its liquidity position. Therefore, this research is conducted to determine the influence of bank-specific and macro environmental variables on commercial banks' liquidity in Pakistan. The data is taken from 20 commercial banks over the period2009 to 2018. Different panel data regression models are used. The study found that leverage (LEV) and capital adequacy ratio (CAR) have a negative but significant impact on the liquidity of the banks.Moreover, the exchange rate (FER) was found to have a positive and significant effect on the liquidity of commercial banks. Furthermore, there is insignificant relation between asset size (SIZE), government deficit financing (GDF) and inflation rate (INF) with the bank's liquidity.

    Banking Sector, Liquidity, CAR, Leverage, Bank Size, Pakistan

    (1) Muhammad Mahmood Shah Khan
    Assistant Professor, Hasan Murad School of Management, University of Management and Technology, Lahore, Pakistan.
    (2) Muhammad Zain ul Abidin
    Lahore Business School, The University of Lahore, Punjab, Pakistan.
    (3) Sheikh Khurram Abid
    The University Of Lahore, Punjab, Pakistan.
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Cite this article

APA

    APA : Khan, M. M. S., Abidin, M. Z. u., & Abid, S. K. (2022). Impact of Macroeconomic and Bank-Specific Factors on Liquidity of Commercial Banks in Pakistan. Global Regional Review, VII(I), 269-285 . https://doi.org/10.31703/grr.2022(VII-I).24

CHICAGO

    CHICAGO : Khan, Muhammad Mahmood Shah, Muhammad Zain ul Abidin, and Sheikh Khurram Abid. 2022. "Impact of Macroeconomic and Bank-Specific Factors on Liquidity of Commercial Banks in Pakistan." Global Regional Review, VII (I): 269-285 doi: 10.31703/grr.2022(VII-I).24

HARVARD

    HARVARD : KHAN, M. M. S., ABIDIN, M. Z. U. & ABID, S. K. 2022. Impact of Macroeconomic and Bank-Specific Factors on Liquidity of Commercial Banks in Pakistan. Global Regional Review, VII, 269-285 .

MHRA

    MHRA : Khan, Muhammad Mahmood Shah, Muhammad Zain ul Abidin, and Sheikh Khurram Abid. 2022. "Impact of Macroeconomic and Bank-Specific Factors on Liquidity of Commercial Banks in Pakistan." Global Regional Review, VII: 269-285

MLA

    MLA : Khan, Muhammad Mahmood Shah, Muhammad Zain ul Abidin, and Sheikh Khurram Abid. "Impact of Macroeconomic and Bank-Specific Factors on Liquidity of Commercial Banks in Pakistan." Global Regional Review, VII.I (2022): 269-285 Print.

OXFORD

    OXFORD : Khan, Muhammad Mahmood Shah, Abidin, Muhammad Zain ul, and Abid, Sheikh Khurram (2022), "Impact of Macroeconomic and Bank-Specific Factors on Liquidity of Commercial Banks in Pakistan", Global Regional Review, VII (I), 269-285

TURABIAN

    TURABIAN : Khan, Muhammad Mahmood Shah, Muhammad Zain ul Abidin, and Sheikh Khurram Abid. "Impact of Macroeconomic and Bank-Specific Factors on Liquidity of Commercial Banks in Pakistan." Global Regional Review VII, no. I (2022): 269-285 . https://doi.org/10.31703/grr.2022(VII-I).24