Determinants of Liquidity Risk and Credit Risk An Empirical Study on Indian Bank

Abstract

Financial risk assessment and management in Indian banking is becoming increasingly newlineimportant area of research for maintaining financial firmness. The liquidation of Lehman newlineBrothers Bank in US in September, 2008 was found to be the major cause of financial crises newlinein the economy, provoking a global credit crunch, thus restraining the financial growth to a newlinelarge extend. newlineThe study attempted to identify and examine correlation between financial risk focusing newlinemainly on liquidity and credit crises and factors affecting it. The research is descriptive and newlineanalytical in nature based on data collected from secondary sources. The target population newlineincludes involves scheduled commercial banks (public owned banks, private owned banks newlineand foreign banks) operating in India. The sample is selected on the basis of availability of newlinedata for a constant duration. To test the proposed theoretical model which was based on newlineconceptual framework laid down by RBI, panel data regression model is applied. newline newline