INSPECTING THE EFFECTIVENESS OF LIQUIDITY RISK ON BANKS PROFITABILITY

Mohammad Hossein Khadem Dezfouli; Ali Hasanzadeh; Mahshid Shahchera

doi:10.65453/ajbmr.v3i9.651

Authors

Mohammad Hossein Khadem Dezfouli Master of Business Administration, Faculty of Management, Qazvin Branch, Islamic Azad University, Qazvin, Iran
Ali Hasanzadeh Ph.D. in Economics, Faculty Member and Associate of Monetary and Banking Research Institute (MBRI), Tehran, Iran
Mahshid Shahchera Ph.D. in Economics, Faculty Member and Associate of Monetary and Banking Research Institute (MBRI), Tehran, Iran

DOI:

https://doi.org/10.65453/ajbmr.v3i9.651

Keywords:

Bank profitability, Liquidity risk, Effectiveness, Banks Profitability

Abstract

Banking system is the beating heart of every economical system and many factors affect its performance; liquidity risk variables are among most important these factors. Some of the variables are NPL (Non-Performing loans) ratios, liquidity ratios, liquidity gap ratio, capital ratio, and bank size. In this paper, it is attempted to examine the relation between these variables and Iranian banking system performance factors including profitability factors as ROE and ROA. Also, the impact of microeconomic factors on Iranian banking system performance is assessed. Using a four-step econometric model and GMM linear forecasting model, it was concluded that there is a significant relation between mentioned factors (dependent variables) and the profitability ones (independent variables).