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Determinants of the Slovak bank liquidity flows

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  • Jana Lastuvkova

    (Department of Finance, Faculty of Business and Economics, Mendel University in Brno)

Abstract

This paper discusses the possible determinants of liquidity flows in the Slovak banking sector. By these flows it is meant the outflow, the net changes and the total value of the liquidity. The flows are obtained according to a specific method of measuring liquidity risk – method of gross liquidity flows. Determinants are evaluated for size groups of the Slovak banking sector conducting panel regressions. Among the factors, there are involved macroeconomic factors, as well as, factors on the level of the market and individual banks, to cover all levels of determinants influencing bank liquidity. The regressions performed have shown that the factors may not only affect liquidity creation, often investigated by other authors, but also its outflow and net changes. From the results, it is also obvious, that banks reflect external environment, as well as, internal characteristics. It seems that Slovak banks create liquidity reserves during favourable economic development and are forced to use them in the time of crisis. On the other hand, for the final value of liquidity, which is a cumulative result of individual flows for more periods, it is more important for banks to reflect the internal factors to adjust the liquidity value.

Suggested Citation

  • Jana Lastuvkova, 2015. "Determinants of the Slovak bank liquidity flows," MENDELU Working Papers in Business and Economics 2015-51, Mendel University in Brno, Faculty of Business and Economics.
    • Handle: RePEc:men:wpaper:51_2015
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Slovak banking sector; measurement of the bank liquidity; liquidity flows; liquidity determinants;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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