Share these talks and lectures with your colleagues
Invite colleaguesPractice paper
Nexus between liquidity risk and credit risk: Evidence from the South Asian region
Journal of Risk Management in Financial Institutions,
15
(4),
391-405
(2022)
Abstract
This study investigates the reciprocal relationship between liquidity risk and credit risk and their individual and joint impact on the stability of commercial banks in the South Asian countries, ie Pakistan, Bangladesh and India, from 2004 to 2016. The results reveal that liquidity risk and credit risk have a significantly positive reciprocal and economically meaningful relationship. Each risk type individually and jointly negatively affects banking stability. This impact has been more observable during the global financial crisis. The findings provide valuable insights for bank managers and regulatory authorities. Banks should be more concerned about mitigating their liquidity and credit risks by managing more qualified loan portfolios and investing in less risky liquid assets.
Keywords: banking stability; credit risk; liquidity risk; South Asia region
The full article is available to subscribers to the journal.
Author's Biography
Ajab Khan works as senior lecturer and module leader in accounting and finance at Southampton Solent University, UK. He has nearly 13 years' extensive experience in teaching, researching, administration and consultancy at various well-regarded universities. His qualifications comprise a PhD, MS in Management, MBA, BA (Economics), and BS in IT (4 years). His research interests include corporate governance and finance, financial risk management and business sustainability.
Mustafa K. Yilmaz is a professor of finance and serves as the Dean of Business School at Ibn Haldun University, Istanbul. He received his PhD from the Banking and Insurance Institute at Marmara University in 1998. He worked as an expert at the Undersecretariat of Treasury from 1991 to 1994. From 1994 to 2016, he worked at Borsa Istanbul in various roles. His research interests include capital markets, corporate finance, sustainability and corporate governance.
Citation
Khan, Ajab and Yilmaz, Mustafa K. (2022, October 1). Nexus between liquidity risk and credit risk: Evidence from the South Asian region. In the Journal of Risk Management in Financial Institutions, Volume 15, Issue 4. https://doi.org/10.69554/YAKK1498.
© Henry Stewart
Publications LLP
Publications LLP