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Liquidity Ratios of Polish Commercial Banks

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  • Pavla VODOVÁ

Abstract

As liquidity problems of some banks during global financial crisis reemphasized, liquidity is very important for functioning of financial markets and the banking sector. The aim of this paper is therefore to evaluate comprehensively the liquidity positions of Polish commercial banks via five different liquidity ratios in the period of 2001- 2011 and to find out whether the strategy for liquidity management differs by the size of the bank. The results enable us to conclude that liquidity of Polish banks has decreased in recent years, partly as a result of higher lending activity but mainly due to the financial crisis. Almost all Polish banks are sensitive to potential massive deposit withdrawals. Only some banks finance their lending activity by deposits; most banks are dependent on other sources of finance. Large and medium sized banks rely on the interbank market or on a liquidity assistance of the Lender of Last Resort, small banks hold buffer of liquid assets.

Suggested Citation

  • Pavla VODOVÁ, 2013. "Liquidity Ratios of Polish Commercial Banks," European Financial and Accounting Journal, University of Economics, Prague, vol. 2013(3).
  • Handle: RePEc:prg:jnlefa:v:2013:y:2013:i:3:id:105
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    References listed on IDEAS

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    1. Alin Marius Andries, 2009. "A comparative analysis of performance and soundness indicators of the main Romanian banks," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 56, pages 45-70, November.
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    7. Natalia T Tamirisa & Deniz O Igan, 2008. "Are Weak Banks Leading Credit Booms? Evidence from Emerging Europe," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 50(4), pages 599-619, December.
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    More about this item

    Keywords

    Liquidity ratio; Liquidity risk; Commercial banks.;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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