Yesterday, the National Bank hosted the 35th Research Club session. Vice Governor Ana Mitreska delivered the keynote address that was followed by presentation of research paper Determinants of Liquidity and its Relationship with Profitability: The Case of Macedonian Banking Sector by Prof. Dr. Gjorgji Gockov and Goran Hristovski from the Faculty of Economics, Ss Cyril and Methodius University in Skopje.
In the first part of the paper, the authors give an overview of the liquidity and profitability in the Macedonian banking sector, thus including a brief comparative analysis of these indicators in relation to several other countries. As pointed out by Hristovski, our banking sector is characterized by high liquidity and solid profitability.
In the second part of the paper, Gockov and Hristovski carry out an empirical assessment of the determinants of liquidity. They use generalized method of moments (GMM) for the period from 2007 to 2017. According to their results, there is a positive relationship between the past values of liquidity, profitability, amount of non-performing loans and interest rate on CB bills, while the relationship with the bank’s size is inverse.
After the presentation of the paper, the participants also discussed several issues related thereto.
The next Research Club session will be held in March next year.
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