Liquidity Creation and Bank Performance of Syrian Banks before and during the Syrian War

Ahmad Sahyouni and Man Wang
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Ahmad Sahyouni: Higher Institute for Administrative Development, Damascus University, 0100 Damascus, Syria
Man Wang: China Internal Control Research Center, Dongbei University of Finance and Economics, Dalian 116025, China

IJFS, 2019, vol. 7, issue 3, 1-17

Abstract: This paper estimates the amount of liquidity created by Syrian banks between 2004 and 2016, and further investigates the effect of liquidity creation on bank performance, controlling for a set of bank-level, industry-level, and macroeconomic variables. The findings show bank liquidity creation improved during the pre-war period and showed positive figures, but started to decline sharply during wartime. The results also show a negative relationship between liquidity creation and bank profitability (return on assets) during wartime; however, this relationship was insignificant before the war. Finally, this study conducted robustness checks to confirm its findings.

Keywords: liquidity creation; bank performance; Syria; war; instrumental variable (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2019
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