Impact of Economic Policy Uncertainty on Bank Liquidity Creation in Chinese Banks

Authors

  • Muhammad Ejaz Majeed PhD Scholar, Faculty of Management Sciences, International Islamic University Islamabad
  • Syed Zufiqar Ali Shah Department of Accounting and Finance, International Islamic University Islamabad

Abstract

Banks perform vital role for economic development of countries through creating liquidity. The negative effect of economic policy uncertainty on liquidity creation ultimately harms economic growth. This study attempts to investigate the impact of economic policy uncertainty on bank liquidity creation in China during 2011 to 2020. The results show significant adverse impact of economic policy uncertainty on bank liquidity creation. The results are robust to different proxies of policy uncertainty and GMM settings. It suggests government must take steps to ensure certainty in policy implementation in order to promote stable banking system. The study offers a few recommendations for future research.

Key Words: Liquidity Creation, Economic Policy Uncertainty

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Published

2023-12-16

Issue

Vol. 2 No. 2 (2023): Journal of Business and Management Research

Section

Articles

How to Cite

Impact of Economic Policy Uncertainty on Bank Liquidity Creation in Chinese Banks. (2023). Journal of Business and Management Research, 2(2), 994-1003. https://jbmr.com.pk/index.php/Journal/article/view/90