Abstract
This study analyzes the determinants of liquidity risk in the banking sector using panel data from 28 banks and three different models: Pooled, Fixed Effect, and Random Effect. The results show that leverage has a consistently positive effect on liquidity risk, while the regulatory environment and bank size have a negative effect. Return on assets (ROA) and capital adequacy ratio (CAR) have varying impacts depending on individual bank characteristics. Real GDP has a consistently negative relationship with liquidity risk. These findings provide valuable insights for policymakers and bank managers on how to manage liquidity risk in the banking sector.
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