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Analysis of Determinants of Liquidity Risk in Polish Banking Sector

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Contemporary Trends and Challenges in Finance

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Abstract

The purpose of this paper is to identify dependences between bank liquidity risk and selected group of internal determinants including levels of credit risk, capital ratio and profitability. The dependence study employed the estimation of correlation coefficient within two groups of banks forming the Polish banking sector, including commercial and cooperative banks. The research revealed the existence of correlation (statistically significant) between financial liquidity level and internal determinants across two groups of banks. However, there were various directions of correlation between liquidity risk and capital ratio evidenced for those two groups of Polish banks. The cooperative banking sector was diagnosed with the existence of strong positive dependence between liquidity and capital ratio, which may suggest the focus in those banks on increasing financial safety regardless the stage of economic cycle as well as on increasing the lending capacity of non-financial sector.

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Correspondence to Agnieszka Wójcik-Mazur .

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Wójcik-Mazur, A. (2019). Analysis of Determinants of Liquidity Risk in Polish Banking Sector. In: Jajuga, K., Locarek-Junge, H., Orłowski, L., Staehr, K. (eds) Contemporary Trends and Challenges in Finance. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-15581-0_4

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