PRECONDITIONS OF THE EUROZONE ECONOMIC SECURITY: HOW TO OVERCOME LIQUIDITY RISK AND COST INEFFICIENCY IN LEADING BANKS OF UK AND GERMANY
Journal Title: Polish Journal of Management Studies - Year 2018, Vol 18, Issue 1
Abstract
Among many factors affecting economic security of the Eurozone, performance of banks play especially important role. The aim of this study is to investigate factors influencing performance of banking sector in UK and Germany. Performance is being estimated using indicators of liquidity and cost efficiency in the biggest banks of both indicated countries. For analysis data of eight banks from each country have been used, two periods of years 2009-2010, and 2012-2014 have been distinguished. Fixed effect model has been employed. The obtained results revealed some significant relationships. Specifically, liquidity is negatively influenced by interest margin in banking sector of both countries during both considered periods, what initiated more active lending. That, in its turn, reduced banks’ liquidity and conditioned lower margins. Bank size did affect liquidity (loan to asset ratio) neither in UK, nor in Germany. Obtained results can be used for respective policy implications directed to sustaining better performance of banks, and therefore for increased economic security of the Eurozone economies.<br/><br/>
Authors and Affiliations
Manuela Tvaronavičienė, Omar Masood, Kiran Javaria
Keywords
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- EP ID EP428269
- DOI 10.17512/pjms.2018.18.1.31
- Views 44
- Downloads 0
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