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Interaction of Liquidity Creation, Regulatory Capital, and Risk Taking at ASEAN Banks
Syarief Fauzie & Paidi Hidayat

Faculty of Economic and Business, University of Sumatera Utara


Abstract

The purpose of this study is to find out how the interaction between liquidity creation, regulatory capital, and risk-taking in the banking industry in ASEAN countries. The test in this study uses a panel vector auto-regression model to be able to see the interaction between the three variables. The research data used is quarterly data from banks listed on the stock exchange in the period 2009 - 2017. The results of the study indicate that there is a positive reciprocal relationship between regulatory capital and risk-taking. Also, the regulatory capital regulations of the previous four quarters reduced liquidity creation. The results also show that there is no interaction between liquidity creation and risk-taking.

Keywords: Liquidity creation, regulatory capital, risk-taking

Topic: Financial Management and Accounting

Link: https://ifory.id/abstract/VT6Bzh9enm2d

Conference: The 4th Global Conference on Business, Management and Entrepreneurship (GCBME 2019)

Plain Format | Corresponding Author (Syarief Fauzie)

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