Abstract
This research identifies factors that explain the liquidity of commercial banks in the Vietnam banking system from 2010 to 2015. Using the OLS regression method for analysis, it was found that: the interbank market helps commercial banks improve their liquidity; the larger the loan size, the higher the liquidity risk; good credit risk management has a positive impact on liquidity risk management; and long-term interest rate is negatively related to the liquidity of commercial banks. The research also makes recommendations on liquidity risk management policies to banks and policy-makers from the Government and the State Bank of Vietnam.
Highlights
Project 254 approved by the Vietnamese Government for restructuring credit organizations over the period 2011–2015 has achieved many remarkable results in Vietnam, an emerging economy
For many joint In Vietnam, a negative relationship it found stock banks, the medium- and long-term lending between Loans on total short-term deposits rate (LDR) and bank liquidity from April 2012 interest rates for priority areas rose from 10% to to October 2015
As far as previous studies are concerned, the results in the paper are consistent with the findings of Vu (2012) which indicate that the total loans to total capital ratio is inversely related to bank liquidity
Summary
Project 254 approved by the Vietnamese Government for restructuring credit organizations over the period 2011–2015 has achieved many remarkable results in Vietnam, an emerging economy. Liquidity stability and a decrease in banking system crashes are the undeniable successes of the State Bank of Vietnam (SBV). This research aims to examine the impacts of internal and external factors on the liquidity risk of the commercial banks of Vietnam during the 6-year period, from 2010 to 2015.
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