The influence of main macroeconomic indicators on banking sector liquidity in Serbia

• Main Author: Račić Željko
• Format: Article
• Language: English
• Published: Visoka poslovna škola strukovnih studija, Novi Sad 2014-01-01
• Series: Škola Biznisa
• Subjects: the banking sector; liquidity; risk management; econometric model of the panel; world economic crisis; the macroeconomic indicators
• Online Access: http://scindeks-clanci.ceon.rs/data/pdf/1451-6551/2014/1451-65511402067R.pdf

The banking sector in Serbia can be characterized as a very liquid one. Main reasons for the high liquidity are the decrease in credit lending activity of banks and increase of the share of NPLs (i.e. non-performing loans) in the total number of loans in the post-crisis period. The aim of this paper is to analyze the influence of the initial impact of the global economic crisis as well as the influence of main macroeconomic indicators of the banking sector liquidity. The research results support the thesis that the growth of the GDP, the decline in unemployment, reduction of the balance of payments deficit and reduction of inflation have an impact on reducing liquidity. The general conclusion is that the Republic of Serbia needs to implement economic measures in this direction. This would take the liquidity of the sector to an optimum level.