Authors :
Nurun Nahar; Ummay Mahima Ima
Volume/Issue :
Volume 7 - 2022, Issue 11 - November
Google Scholar :
https://bit.ly/3IIfn9N
Scribd :
https://bit.ly/3WfW5QE
DOI :
https://doi.org/10.5281/zenodo.7465901
Abstract :
The objective of the research is to determine the
factors varying the liquidity risk of Conventional and
Islamic Sariah-based banks in Bangladesh. The random
effect model is used in the study to detect the relationship
between liquidity risk and each of the independent
variables. The study shows that 7 of the variables including
loan-to-asset ratio, cash ratio, equity ratio, size, return on
asset, return on equity, and capital adequacy ratio are the
significant determinants for conventional banks whereas
loan to asset ratio, return on asset, cash ratio, and capital
adequacy ratio are the significant determinants in Islamic
banks. It is also found that the loan to asset ratio and
return on asset have a positive impact but capital adequacy
ratio, cash ratio, age of the bank, equity ratio & the size of
the bank has a negative impact on the liquidity risk in both
conventional and Islamic banks. The findings of this study
can be very useful for different parties who want to find
the relationship between firm-specific factors and the
liquidity risk of the banking industry.
Keywords :
Liquidity; Risk; Cash ratio; Return on Asset; Equity; Loan to Asset Ratio.
The objective of the research is to determine the
factors varying the liquidity risk of Conventional and
Islamic Sariah-based banks in Bangladesh. The random
effect model is used in the study to detect the relationship
between liquidity risk and each of the independent
variables. The study shows that 7 of the variables including
loan-to-asset ratio, cash ratio, equity ratio, size, return on
asset, return on equity, and capital adequacy ratio are the
significant determinants for conventional banks whereas
loan to asset ratio, return on asset, cash ratio, and capital
adequacy ratio are the significant determinants in Islamic
banks. It is also found that the loan to asset ratio and
return on asset have a positive impact but capital adequacy
ratio, cash ratio, age of the bank, equity ratio & the size of
the bank has a negative impact on the liquidity risk in both
conventional and Islamic banks. The findings of this study
can be very useful for different parties who want to find
the relationship between firm-specific factors and the
liquidity risk of the banking industry.
Keywords :
Liquidity; Risk; Cash ratio; Return on Asset; Equity; Loan to Asset Ratio.
