Basel III New Liquidity Framework and Malaysian Commercial Banks Profitability
Kerangka Kecairan Baru Basel III dan Keuntungan Bank Perdagangan di Malaysia

UKM-Graduate School of Business
Universiti Kebangsaan Malaysia
43600 UKM Bangi, Selangor, MALAYSIA.

rasidah@ukm.edu.my

Abstract

In the light of the 2007-2008 global financial crisis, Basel Committee on Banking Supervision proposed the Net Stable Funding Ratio (NSFR), a new liquidity framework under Basel III. Its aim is to promote sustainable funding structures of the financial institutions. This current paper attempts to analyse NSFR impact on Malaysian commercial banks profitability. Using panel data of eight domestic Malaysian commercial banks for the period 2005-2011, the results suggest there is a convincing evidence that this new liquidity ratio is an important factor in affecting the sample banks’ profitability. The ability of banks in managing the stability of their funding sources as well as liquidity of its asset is an advantage to them and is translated into higher profitability. In addition, this study also confirms finding of previous studies that relates bank-specific determinants and profitability.

Keywords

Basel III; liquidity coverage ratio; liquidity framework; net stable funding ratios; profitability
https://doi.org/10.17576/pengurusan-2018-52-09

Citation

Mohd Said, R. M. (2018). Basel III New Liquidity Framework and Malaysian Commercial Banks Profitability. Jurnal Pengurusan, 52, 111–120. https://doi.org/10.17576/pengurusan-2018-52-09

@article{mohdsaid2018basel,
  title={Basel III New Liquidity Framework and Malaysian Commercial Banks Profitability},
  author={Mohd Said, Rasidah},
  journal={Jurnal Pengurusan},
 

volume={52},
  number={},
  pages={111—120},
  year={2018},
  doi={https://doi.org/10.17576/pengurusan-2018-52-09},
  publisher={Penerbit UKM},
}

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52 (2018) 111 – 120

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