ChnStd  Vol.6 No.1 , February 2017
Does the Expansion of Interbank Business Diminish the Liquidity of Banks in China?
Abstract: The interbank business gradually becomes one of the main businesses of a bank. The interbank business has great influence on the liquidity of banks. This article makes use of the panel data of twenty-three different types of business banks from 2009 to 2015 to analyze the relationship between interbank business and the liquidity of banks and the factors that affect the bank liquidity. The results show that the interbank business affects the liquidity of banks through three impact paths which are maturity mismatch, the allocation of funds and meaningless capital turnover. Besides, the relationship between the interbank business and bank liquidity is negative, and the expansion of interbank business would result in the decrease of liquidity level.
Cite this paper: Xu, Z. (2017) Does the Expansion of Interbank Business Diminish the Liquidity of Banks in China?. Chinese Studies, 6, 12-23. doi: 10.4236/chnstd.2017.61002.

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