TY - JOUR
T1 - The effects of economic policy uncertainty and country governance on banks' liquidity creation
T2 - International evidence
AU - Wang, Chih Wei
AU - Lee, Chien Chiang
AU - Chen, Ming Chien
N1 - Publisher Copyright:
© 2022 Elsevier B.V.
PY - 2022/2
Y1 - 2022/2
N2 - This study empirically investigates the effects of economic policy uncertainty (EPU) and country governance on bank liquidity creation in various countries. Using the cross-country bank data, we find that EPU harms asset-side liquidity creation and benefits liability-side liquidity creation. The results reveal that uncertainty hinders bank credit, and people tend to make deposits in banks for safety. Moreover, country governance mitigates the negative impact of EPU on bank liquidity creation. Our results are robust in the subsample, two-stage least squares regression, and generalized method of moments analyses. Overall, our findings have crucial policy implications for policy makers and bankers.
AB - This study empirically investigates the effects of economic policy uncertainty (EPU) and country governance on bank liquidity creation in various countries. Using the cross-country bank data, we find that EPU harms asset-side liquidity creation and benefits liability-side liquidity creation. The results reveal that uncertainty hinders bank credit, and people tend to make deposits in banks for safety. Moreover, country governance mitigates the negative impact of EPU on bank liquidity creation. Our results are robust in the subsample, two-stage least squares regression, and generalized method of moments analyses. Overall, our findings have crucial policy implications for policy makers and bankers.
KW - Bank liquidity creation
KW - Country governance
KW - Economic policy uncertainty
UR - http://www.scopus.com/inward/record.url?scp=85122919994&partnerID=8YFLogxK
U2 - 10.1016/j.pacfin.2022.101708
DO - 10.1016/j.pacfin.2022.101708
M3 - 期刊論文
AN - SCOPUS:85122919994
SN - 0927-538X
VL - 71
JO - Pacific Basin Finance Journal
JF - Pacific Basin Finance Journal
M1 - 101708
ER -