An Empricial Study on Impact Liquidity Risk Management on Firm Performance in the Conventional Banking of Pakistan

Abstract

Liquidity management could be banking perform key and integral a part of the management plus liability method. Most banking business depends on the flexibility of a bank to supply liquidity to their purchasers. The Purpose of this study to analyze the Lies within the problem of estimating the extent of bank liquidity that Conventional banks should keep them that guarantee the fulfilment of all its monetary obligations, and at the same time modify them to maximize investments and profits. The study tested the connection between bank liquidity risk and performance in Conventional banks in Pakistan. Within the bank liquidity risk and performance model, we have a tendency to regard liquidity risk as associate endogenous determinant of bank performance, and apply panel knowledge instrumental variables regression to estimate this model. Regression analysis could be applied mathematics method for estimating the relationships among variables. Most ordinarily regression analysis estimates the conditional expectation of the variable given the freelance variables that's, the average worth of the variable once the freelance variables area unit fastened. The current review also highlights that the literature on current state of firm performance with respect to liquidity risk management is very limited especially in context of Pakistan which requires scholarly research contribution to better understand and conceptualize characteristics and complexities surrounding liquidity risk management in banking sector. The contribution of this research is to propose a conceptual framework based on the gaps in the literature for further research in context of Pakistan. Conclusions and future implications for theory, practice