Social unrest and bank liquidity creation: evidence from MENA banks

IF 1.3 Q3 ECONOMICS Journal of Financial Economic Policy Pub Date : 2024-06-14 DOI:10.1108/jfep-09-2023-0257

Saibal Ghosh

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Abstract

Purpose

A host of studies have assessed the determinants of bank liquidity creation, highlighting the relevance of macroeconomic and microeconomic factors. However, whether and how social unrest impacts bank liquidity creation remains a moot issue. To inform this debate, this study aims to exploit bank-level data for Middle East and North Africa (MENA) countries covering the period 2010–2019 to assess the interlinkage between social unrest and bank liquidity creation.

Design/methodology/approach

In view of the staggered inception of social unrest across MENA countries, the author uses a difference-in-differences specification to tease out the causal impact.

Findings

The findings reveal that the Arab Spring improves liquidity creation after onboarding after confounding factors. This impact differs across conventional and Islamic banks and differs across asset side (market) and liability side (funding) liquidity creation. The evidence also underscores the positive real effects of such liquidity creation on real economic output.

Originality/value

This is one of the early studies exploiting a large sample of MENA banks to examine this issue in a systematic manner.

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社会动荡与银行流动性创造：来自中东和北非银行的证据

目的大量研究评估了银行创造流动性的决定因素，强调了宏观经济和微观经济因素的相关性。然而，社会动荡是否以及如何影响银行流动性的创造仍是一个悬而未决的问题。为了给这一争论提供信息，本研究旨在利用 2010-2019 年期间中东和北非（MENA）国家的银行级数据，评估社会动荡与银行流动性创造之间的相互联系。研究结果研究结果表明，"阿拉伯之春 "在混淆因素后改善了入职后的流动性创造。这种影响在传统银行和伊斯兰银行之间存在差异，在资产方（市场）和负债方（资金）流动性创造方面也存在差异。证据还强调了这种流动性创造对实际经济产出的积极实际影响。

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来源期刊

Journal of Financial Economic Policy ECONOMICS-

CiteScore

2.80

自引率

8.30%

发文量

期刊介绍： The Journal of Financial Economic Policy publishes high quality peer reviewed research on financial economic policy issues. The journal is devoted to the advancement of the understanding of the entire spectrum of financial policy and control issues and their interactions to economic phenomena. Economic and financial phenomena involve complex trade-offs and linkages between various types of risk factors and variables of interest to policy makers and market participants alike. Market participants such as economic policy makers, regulators, banking and competition supervisors, corporations and financial institutions, require timely and robust answers to the contemporary and emerging policy questions. In turn, such answers require thorough input by the academics, policy makers and practitioners alike. The Journal of Financial Economic Policy provides the forum to satisfy this need. The journal publishes and invites concise papers to enable a prompt response to current and emerging policy affairs.