A Comparative Analysis of the Determinants of Liquidity Risk Exposure in the Banking Sector of the Republic of Serbia and Banking Sectors of Former Socialist Countries
Abstract:
The purpose of this paper is to point out statistically significant empirical
determinants of the exposure to liquidity risk for banks operating in the
Republic of Serbia, and to perform a comparative analysis of the impact of
these determinants on Serbian banks and banks from countries that have
gone through a transitional period from being socialist countries to becoming
members of the EU. Results indicate that increased exposure to liquidity
risk in the local banking sector is associated with the following factors: high
financial leverage, GDP growth, decline in the unemployment rate, decline
in the deficit of balance of payments and an appreciation of local currency.
The general impression is that the local banking sector is faced with an excessively
high level of liquidity. Based on the comparative analysis carried
out, and assuming that the Republic of Serbia undergoes a transition process
that follows a model similar to that of the analysed EU members, several
conclusions can be drawn regarding the nature of the effect of determinants
of exposure to liquidity risk on banks during the transition period. It is to be
expected that larger banks will keep their liquidity at relatively lower levels,
that the development of the financial markets will lead to a change in liquidity
management strategy and a reorientation of local banks to purchased liquidity
management, and that the levels of capital adequacy will converge to that
prescribed by the Basel regulatory framework.
CITATION:
IEEE format
. Račić, N. Stanišić, N. Stanić, “A Comparative Analysis of the Determinants of Liquidity Risk Exposure in the Banking Sector of the Republic of Serbia and Banking Sectors of Former Socialist Countries,” in Sinteza 2016 - International Scientific Conference on ICT and E-Business Related Research, Belgrade, Singidunum University, Serbia, 2016, pp. 424-434. doi:10.15308/Sinteza-2016-424-434
APA format
Račić, ., Stanišić, N., Stanić, N. (2016). A Comparative Analysis of the Determinants of Liquidity Risk Exposure in the Banking Sector of the Republic of Serbia and Banking Sectors of Former Socialist Countries. Paper presented at Sinteza 2016 - International Scientific Conference on ICT and E-Business Related Research. doi:10.15308/Sinteza-2016-424-434