<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This study measures liquidity creation within a sample of 153 banks operating in 12 Middle Eastern and North African (MENA) countries from 2008 to 2017. We found that these banks created a total of $461.32 billion in liquidity in 2017, approximately 1.51 times the total liquidity created in 2008, mainly driven by commercial banks in Gulf Cooperation Council (GCC) countries. We also conducted an econometric analysis to investigate the internal and external factors affecting bank liquidity creation, applying a Fixed Effects model and the new Method of Moments Quantile Regression (MMQR). The results show that, among bank-specific factors, bank liquidity creation in MENA countries is related to capital, size, bank risk, deposits and profitability whilst market concentration does not appear to play a significant role. Regarding macroeconomic factors, inflation, unemployment, savings and monetary policy explain the variations in bank liquidity creation.</p>
</abstract>

This study measures liquidity creation within a sample of 153 banks operating in 12 Middle Eastern and North African (MENA) countries from 2008 to 2017. We found that these banks created a total of $461.32 billion in liquidity in 2017, approximately 1.51 times the total liquidity created in 2008, mainly driven by commercial banks in Gulf Cooperation Council (GCC) countries. We also conducted an econometric analysis to investigate the internal and external factors affecting bank liquidity creation, applying a Fixed Effects model and the new Method of Moments Quantile Regression (MMQR). The results show that, among bank-specific factors, bank liquidity creation in MENA countries is related to capital, size, bank risk, deposits and profitability whilst market concentration does not appear to play a significant role. Regarding macroeconomic factors, inflation, unemployment, savings and monetary policy explain the variations in bank liquidity creation.

Bank-Specific and Macroeconomic Determinants of Bank Liquidity Creation: Evidence from MENA Countries

Journal of Central Banking Theory and Practice

This work is licensed under the Creative Commons Attribution 4.0 International License.

This study measures liquidity creation within a sample of 153 banks operating in 12 Middle Eastern and North African (MENA) countries from 2008 to 2017. We...

Bank-Specific and Macroeconomic Determinants of Bank Liquidity Creation: Evidence from MENA Countries

Published Online: Apr 30, 2022

Page range: 55 - 76

Received: Oct 19, 2020

Accepted: Jun 01, 2021

DOI: https://doi.org/10.2478/jcbtp-2022-0013

Keywords
bank liquidity creation, bank-specific and macroeconomic determinants, Method of Moments Quantile Regression, MENA region

© 2022 Anas Alaoui Mdaghri et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Bank-Specific and Macroeconomic Determinants of Bank Liquidity Creation: Evidence from MENA Countries

Published Online: Apr 30, 2022

Page range: 55 - 76

Received: Oct 19, 2020

Accepted: Jun 01, 2021

DOI: https://doi.org/10.2478/jcbtp-2022-0013

Keywordsbank liquidity creation, bank-specific and macroeconomic determinants, Method of Moments Quantile Regression, MENA region

© 2022 Anas Alaoui Mdaghri et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
bank liquidity creation, bank-specific and macroeconomic determinants, Method of Moments Quantile Regression, MENA region