Abstract
Abstract This study measures liquidity creation within a sample of 153 banks operating in 12 Middle Eastern and North African (MENA) countries from 2008 to 2017. We found that these banks created a total of $461.32 billion in liquidity in 2017, approximately 1.51 times the total liquidity created in 2008, mainly driven by commercial banks in Gulf Cooperation Council (GCC) countries. We also conducted an econometric analysis to investigate the internal and external factors affecting bank liquidity creation, applying a Fixed Effects model and the new Method of Moments Quantile Regression (MMQR). The results show that, among bank-specific factors, bank liquidity creation in MENA countries is related to capital, size, bank risk, deposits and profitability whilst market concentration does not appear to play a significant role. Regarding macroeconomic factors, inflation, unemployment, savings and monetary policy explain the variations in bank liquidity creation.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
