{"title":"Enhancing bank liquidity creation through digital innovation: Exploring the impact of macroprudential policy sentiments","authors":"Li Wang , Shangda Li , Zhan Fa , Yanan Wang","doi":"10.1016/j.ememar.2025.101275","DOIUrl":null,"url":null,"abstract":"<div><div>This paper investigates the connection between liquidity creation and bank digital innovation using panel data from 129 Chinese banks between 2010 and 2021. The macroprudential policy sentiment is also introduced into our model to explore how it affects the impact of bank digital innovation on liquidity creation. The results show that bank digital innovation can promote their liquidity creation, and this is primarily achieved through improving the profitability and asset quality of the banks. The sentimental effect of macroprudential policy communication strengthens this promotion, and the effect is significant both among banks in regions with strong financial regulation and high financial disintermediation, as well as banks that are not systemically important. The conclusions provide policy implications for utilizing digital innovation in banks effectively in order to cultivate new quality productive forces.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"66 ","pages":"Article 101275"},"PeriodicalIF":5.6000,"publicationDate":"2025-03-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Emerging Markets Review","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S156601412500024X","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
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Abstract
This paper investigates the connection between liquidity creation and bank digital innovation using panel data from 129 Chinese banks between 2010 and 2021. The macroprudential policy sentiment is also introduced into our model to explore how it affects the impact of bank digital innovation on liquidity creation. The results show that bank digital innovation can promote their liquidity creation, and this is primarily achieved through improving the profitability and asset quality of the banks. The sentimental effect of macroprudential policy communication strengthens this promotion, and the effect is significant both among banks in regions with strong financial regulation and high financial disintermediation, as well as banks that are not systemically important. The conclusions provide policy implications for utilizing digital innovation in banks effectively in order to cultivate new quality productive forces.
期刊介绍：
The intent of the editors is to consolidate Emerging Markets Review as the premier vehicle for publishing high impact empirical and theoretical studies in emerging markets finance. Preference will be given to comparative studies that take global and regional perspectives, detailed single country studies that address critical policy issues and have significant global and regional implications, and papers that address the interactions of national and international financial architecture. We especially welcome papers that take institutional as well as financial perspectives.
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