Open AccessFund Management And the Liquidity of The Bank
Author(s) -
Gantiah Wuryandani,
Ramlan Ginting,
Dudy Iskandar,
Zulkarnain Sitompul
Publication year - 2014
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 4
ISSN - 2460-9196
DOI - 10.21098/bemp.v16i3.446
Subject(s) - market liquidity , accounting liquidity , liquidity risk , liquidity crisis , statutory liquidity ratio , business , liquidity trap , financial system , monetary economics , economics
This paper analyzes the liquidity of banks, both precautionary and involuntary liquidity. We apply dynamic panel estimation on individual bank data covering the period of Januari 2002 to November 2011. The result shows that precautionary liquidity is more determined by the operation of the bank. On the other hand, the involuntary liquidity is more affected by the financial system condition. Related to the size, the effect of the financial system condition and the macroeconomy is larger for the small banks. Moreover, the monetary policy in the form minimum reserve requirement affects the precautionary liquidity of the small banks; while the central bank rate is less influential to the bank liquidity. Keywords: Banking, Liquidity, General Method of MomentJEL classification: G21, G11, C33