The Impacts of Internal and Macroeconomic Factors on Banking Liquidity Risk: Performance in Vietnam

Abstract

The chapter focuses on analyzing the influence of factors affecting liquidity risk in the banking system. Impact factors include a group of internal factors and macroeconomic factors. For this objective, the research analyzes the response function of the panel data analysis method with the Pool OLS model, FEM, and REM, taking data from 17 Vietnamese commercial banks during the period 2010 to 2018. The study results show that a bad debt ratio positively affects banking liquidity risk. In contrast, bank size, equity to total assets ratio, ROE, and the ratio of funds to total debt, FDI factors negatively affect liquidity risk while the factors of GDP, inflation rate, and unemployment rate are not statistically significant.