Determinants of Bank Liquidity Risk; Evidence From Commercial Banks in Ethiopia
| dc.contributor.advisor | Tenkire Seyfu (PhD) | |
| dc.contributor.author | Mihiret Yohannes | |
| dc.date.accessioned | 2026-03-03T05:15:28Z | |
| dc.date.available | 2026-03-03T05:15:28Z | |
| dc.date.issued | 2025-08 | |
| dc.description.abstract | This study analyzes the macroeconomic and bank-specific factors influencing commercial banks' liquidity risk in Ethiopia between 2015 and 2024. Using annual regression analysis and panel data techniques—excluding and including fixed effects, random effects, and dynamic panel models—the study tests the influence of such variables as growth in loans, net interest income, capital adequacy, operational inefficiency, inflation rate, and GDP growth on banks' liquidity. The results pinpoint loan expansion as the most consistent and statistically significant determinant of liquidity, with coefficients ranging from 0.0305 to 0.0612 between models, implying that expanding portfolios of loans has a tendency to enhance liquidity. Inflation also positively but less robustly affects liquidity, with significance largely in dynamic models. The rest of the variables, including capital adequacy, net interest margin, operational inefficiency, and growth in GDP, had minimal or statistically zero effects on liquidity risk. Fit measures of the model, particularly during 2021–2024, indicate stronger explanatory ability, suggesting changing economic conditions or better sufficient alignment of financial metrics with liquidity behavior. The research discovers that prudent loan portfolio growth and prudent inflation tracking would be what effective liquidity risk management of the Ethiopian commercial banks would need, as a substitute to overreliance on traditional macroeconomic or balance sheet indicator | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/7790 | |
| dc.language.iso | en_US | |
| dc.publisher | Addis Ababa University | |
| dc.subject | Ethiopian commercial banks | |
| dc.subject | inflation | |
| dc.subject | loan growth | |
| dc.subject | Liquidity risk. | |
| dc.title | Determinants of Bank Liquidity Risk; Evidence From Commercial Banks in Ethiopia | |
| dc.type | Thesis |