Bank liquidity hoarding during the COVID-19 pandemic

This paper examines the association between bank liquidity hoarding (BLH) and the COVID-19 pandemic. Using a sample of U.S. banks and applying fixed effect estimators, we reveal that banks rack up liquidity assets and liabilities when the pandemic escalates. Our finding holds with alternative BLH an...

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Detalles Bibliográficos
Autores principales: Tran, Dung Viet, Bui, Dien Giau, Nguyen, Cuong, Hoang, Huy Viet
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier Inc. 2023
Materias:
Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10201911/
https://www.ncbi.nlm.nih.gov/pubmed/37305064
http://dx.doi.org/10.1016/j.frl.2023.104021
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author Tran, Dung Viet
Bui, Dien Giau
Nguyen, Cuong
Hoang, Huy Viet
author_facet Tran, Dung Viet
Bui, Dien Giau
Nguyen, Cuong
Hoang, Huy Viet
author_sort Tran, Dung Viet
collection PubMed
description This paper examines the association between bank liquidity hoarding (BLH) and the COVID-19 pandemic. Using a sample of U.S. banks and applying fixed effect estimators, we reveal that banks rack up liquidity assets and liabilities when the pandemic escalates. Our finding holds with alternative BLH and COVID-19 proxies and is further validated by falsification tests. Additional analysis reveals that BLH improves bank stability by reducing earnings volatility, non-performing loans and the propensity to go bankrupt. This study supports the existing literature on BLH and economic adversities and expands our understanding of BLH during the COVID-19 pandemic.
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spelling pubmed-102019112023-05-23 Bank liquidity hoarding during the COVID-19 pandemic Tran, Dung Viet Bui, Dien Giau Nguyen, Cuong Hoang, Huy Viet Financ Res Lett Article This paper examines the association between bank liquidity hoarding (BLH) and the COVID-19 pandemic. Using a sample of U.S. banks and applying fixed effect estimators, we reveal that banks rack up liquidity assets and liabilities when the pandemic escalates. Our finding holds with alternative BLH and COVID-19 proxies and is further validated by falsification tests. Additional analysis reveals that BLH improves bank stability by reducing earnings volatility, non-performing loans and the propensity to go bankrupt. This study supports the existing literature on BLH and economic adversities and expands our understanding of BLH during the COVID-19 pandemic. Elsevier Inc. 2023-07 2023-05-22 /pmc/articles/PMC10201911/ /pubmed/37305064 http://dx.doi.org/10.1016/j.frl.2023.104021 Text en © 2023 Elsevier Inc. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Tran, Dung Viet
Bui, Dien Giau
Nguyen, Cuong
Hoang, Huy Viet
Bank liquidity hoarding during the COVID-19 pandemic
title Bank liquidity hoarding during the COVID-19 pandemic
title_full Bank liquidity hoarding during the COVID-19 pandemic
title_fullStr Bank liquidity hoarding during the COVID-19 pandemic
title_full_unstemmed Bank liquidity hoarding during the COVID-19 pandemic
title_short Bank liquidity hoarding during the COVID-19 pandemic
title_sort bank liquidity hoarding during the covid-19 pandemic
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10201911/
https://www.ncbi.nlm.nih.gov/pubmed/37305064
http://dx.doi.org/10.1016/j.frl.2023.104021
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