Research Article

Measuring Liquidity Risk and Its Determinants in Commercial Banks of Bangladesh: An Empirical Investigation

Md Shah Naoaj
New York University, USA
* Corresponding author
DOI icon 10.24018/ejbmr.2023.8.2.1889

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Submitted 2023-02-21
Published 2023-04-09

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Article Main Content

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.
Keywords: Basel III CAR Determinants Leverage Liquidity Risk Size

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