Liquidity Risk Management:A Comparative Study between Saudi and Jordanian Banks

Journal Article

2013

Published in: http://www.idjrb.com/articlepdf/article3021.pdf

ABSTRACT:This study aimed at examining the liquidity risk management by making comparative study between Saudi and Jordanian banks during the period 2007-2011. The sample included 10 Saudi banks and 14 Jordanian banks. The selection criterion was all the banks listed in Saudi stock exchange (Tadawul) and Amman Stock Exchange
(ASE). The independent variables include SZE, DER, IAR, ROE, LTD, ROA and CAR of the selected banks. The dependent variable was the liquidity risk which measures the most liquid assets of the banks. The ratio analysis along with the descriptive, Pearson’s’ Correlation Analysis and regression analysis was used in this study. The ratio analysis indicates that Jordanian banks liquidity position is higher as compared to the Saudi banks which help the Jordanian banks to pay off its obligations and expose itself to more risk. The ROA, ROE and IAR proved to be more for the Saudi banks than the Jordanian ones, which indicates that Saudi banks are generating more profits through efficient employment of its resources than the Jordanian banks.
Keywords: Liquidity risk management, Return on Assets, Return on Equity, Investment, Capital, Debt.

• Publication Work Type: بحث علمي
• Magazine \ Newspaper: Interdisciplinary Journal of Research in Business ISSN: 2046-7141 Vol. 3, Issue. 02 (pp.01- 10) | 2013