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Journal : Banking

Competition Plays A Moderating Role in The Impact of Liquidity Creation on Bank Capital Fuad, Ahmad; Kalisman, Joko Hartono
Banking & Management Review Vol. 12 No. 2: Banking & Management Review
Publisher : STIE Ekuitas

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.52250/bmr.v12i2.896

Abstract

Introduction/Main Objectives: This study examines the moderating influence of bank competition, proxied by the Lerner index, on the impact of liquidity creation, measured using the Catfat method, on bank capital, proxied by the equity-to-total-assets ratio. Background Problems: Limited academic literature explores how competition moderates the relationship between liquidity creation and bank capital, which is essential for maintaining stability and risk absorption in the banking sector. Novelty: This study fills the gap by demonstrating that the effect of liquidity creation on bank capital depends on the level of bank competition. Research Methods: The study uses purposive sampling, covering 96 banks from 2013 to 2023, and applies panel data regression analysis with Hayes’ method. Control variables include ROA, LDR, NPL, GDP, inflation, and Bank Indonesia interest rates. Findings/Results: The results indicate that competition moderates the negative effect of liquidity creation on bank capital, weakening this impact. This suggests that competition enables banks to maintain higher capital levels. Conclusion: The study highlights the importance of competition in moderating the liquidity creation-capital relationship, with implications for bank management and regulatory policies.
Co-Authors Abi Saptadinata Adyla, M. Faris Ahmad Dani Setiawan Alfons, Jason Armando Allison, Andy Angelina Angelina Ari Pambudi Arief Kusuma Asep Nursobah, Asep Assaf Arief, Assaf Astriko, Feni Atmojo, Heriyanto Betty Tresnawaty, Betty Budi Tjahjono Budisartono, Elvira Budy Wiryawan Christophera R Lucius Darajat Wibawa Darajat, Teddy Muhamad Darsono, Dono Disman, Disman Erry Yudhya Mulyani Febrianti, Sherly Putri Fitrah , Fitrah Hardiatna, Anang Hasrudy Tanjung, Hasrudy Hidayah, Nailla Ichwanudin, Muhammad Ikbal Rachmat Illah Sailah Ilmi, Dima Hafizul Imam Yuwono Indra Gunara Rochyat Irdanuraprida Idris Jeffri Alfa Razaq Kalisman, Joko Hartono Kamil, Kamil Kartini Kartini Lubis, Eva Susanti Lubis, Rusdi Hamka M. Yunus, Badruzzaman Malabay Malabay Manurung, Nazwa Salsabia Zahra Br Manurung, Nazwa Salsabilaahra Maria Ligouri, Eloena Ketsiya Marwan, Rudi Heri Maya, Windi Dwi Mayasari Mayasari, Mayasari Moch. Fakhruroji Muhaemin, Enjang Muhammad, Miftah Muliani, Sri Indah Mulyo Wiharto Musthafa, Izzuddin MUTIARA, DHEA FITRI Najamuddin Najamuddin, Najamuddin Nefianto, Tirton NINING WAHYUNINGSIH Nizam, Mohammad Rafel Nugraha Nugraha Nugroho, Tezar Mega Nuryadi Nuryadi Panggabean, Hadi Saputra Pratama, Muhammad Rizky Purnamasari, Adhellia Putra, Satria Nandha Putri Anggraeni Widyastuti Putri, Saskia Amanda Rahmatang, Putri Ramadhan, Dzul Fadli Royan Ramadhani, Mutia Ramdhani, Mutia Ratih Pratiwi Riya Widayanti Rojudin, Rojudin Sadikin, Irma Savitri SARASWATI, RIA Sembiring, Rinawati Siti Jubaidah, Siti Sophiyanto wuryan Stevanny Stevanny, Stevanny Suciani, Anggun Sulistiawati Sulistiawati Suroto Suroto Suryadi Suryadi Susanto, Beng SYAIFUL BAHRI Tarigan, Mazmur Ummanah Ummanah, Ummanah Wijaya, Rahmat Wiyono, Erina Yani, Dodi Putra Yuliati - Zalianava, Zalianava