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Board Governance Mechanisms and Liquidity Creation: A Theoretical Framework

Author

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  • ALI K.A. Mousa

    ("Department of Accounting and Taxation, College of Business, University Utara Malaysia, Malaysia" Author-2-Name: Nor Laili Hassan Author-2-Workplace-Name: Department of Accounting and Taxation, College of Business, University Utara Malaysia, Malaysia Author-3-Name: Kashan Pirzada Author-3-Workplace-Name: Department of Accounting and Taxation, College of Business, University Utara Malaysia, Malaysia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)

Abstract

"Objective - The highly concentrated ownership structure, lack of quality information, and weak regulatory environments caused imbalances in the movement of cash flows and thereby put the liquidity levels of Gulf Cooperation Council (GCC) banks on a downward trend. This prompted policymakers in the GCC region to modify their Corporate Governance (C.G.) codes to boost the financial position of the GCC banking industry as liquidity providers and minimize systemic risk. Therefore, the purpose of this study is to conceptually investigate the relationship between board governance attributes and liquidity creation in the GCC banking sector. Methodology – The methodology employed in this study is a review of prior research on bank governance mechanisms and liquidity creation to gather perspective and establish a prediction about the association between board attributes and liquidity creation in the GCC banking industry. Findings – The study concludes that there is a positive correlation between the analyzed board governance features and the creation of liquidity based on several theories gleaned from a review of prior research. Novelty – The study evaluates bank liquidity creation and how board attributes influence it. Type of Paper - Review"

Suggested Citation

  • ALI K.A. Mousa, 2022. "Board Governance Mechanisms and Liquidity Creation: A Theoretical Framework ," GATR Journals jfbr204, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:jfbr204
    DOI: https://doi.org/10.35609/jfbr.2022.7.2(3)
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    References listed on IDEAS

    as
    1. Chen, Hsiao-Jung & Lin, Kuan-Ting, 2016. "How do banks make the trade-offs among risks? The role of corporate governance," Journal of Banking & Finance, Elsevier, vol. 72(S), pages 39-69.
    2. Ritab Al-Khouri & Houda Arouri, 2019. "Market power and the role of banks as liquidity providers in GCC markets," Cogent Economics & Finance, Taylor & Francis Journals, vol. 7(1), pages 1639878-163, January.
    3. Berger, Allen N. & Bouwman, Christa H.S. & Kick, Thomas & Schaeck, Klaus, 2016. "Bank liquidity creation following regulatory interventions and capital support," Journal of Financial Intermediation, Elsevier, vol. 26(C), pages 115-141.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Liquidity Creation; Corporate Governance; Agency Theory; Board Attributes; GCC.;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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