Capital, liquidity and profitability in European banks

How to cite this record

Cheung, K. Y. (2021) Capital, liquidity and profitability in European banks. UWE,

UWE Harvard citation (for UWE users)

Cheung, K. Y. (2021) Capital, liquidity and profitability in European banks. UWE data repository [online]. Available from: [Accessed 06 August 2021].

Project Title

Capital, liquidity and profitability in European banks

Brief summary of project

The research aims to investigate the impact of increased capital requirements and high liquidity levels on the profitability of European banks in the post crisis period. The study examines the largest banks in the European Union spanning 28 countries using data from 2010 to 2018. It used three measures to defined bank profitability: return on average assets, return on average equity, and operating profit to risk weighted assets. Capital, liquidity, size, and asset quality represent bank specific determinants, while economy growth and inflation are considered as the main external determinants having influence on profitability. We used multiple regression models to analyse the association between the variables. The results revealed a positive and significant association between liquidity level and bank performance. Asset quality showed a negative and statistically significant influence on bank performance, while economic growth and inflation have no significant influence on bank performance. The study concludes that there is limited influence of the Basel III on bank profitability although the policy is important in achieving banking stability. This study contributes to the literature by empirically analysing the impact of capital regulation on bank performance for the biggest banks in Europe. Although the Basel III framework is important for prudential banking, its impact on the performance of European bank is debatable.




Item Type: Dataset
Methodology: Regression
Language of the Dataset Collection: English
Creators: Cheung, K. Y.
Additional Team Member: Adelopo, I.
UWE Faculty/Department: Faculty of Business and Law > Department of Accounting, Economics and Finance
Depositing User: K. Cheung
Date Deposited: 29 Jul 2021 07:58
Last Modified: 29 Jul 2021 07:58

Data files

[img] Spreadsheet
Nikolina data 2010 2018 (1).xlsx
Available under License Creative Commons Attribution Non-commercial.

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