Executive
Summary
This research identifies and examines
the potential causes of liquidity risk of 10 private commercial banks in Bangladesh
and evaluates their effect on banks’ Loan to Deposit. The research displays an
empirical relationship between factors of liquidity risk and their effect on Loan
to Deposit of the banking sector.
Data is collected from the income statements, balance sheet of 10 private
commercial banks in Bangladesh during 2007-2016. Multiple regressions are
applied on data in order to evaluate the impact of liquidity risk on banks’ Loan
to Deposit. The results of multiple regressions show that banks’ Loan to Deposit
is affected by liquidity risk significantly. Economic factors supporting
liquidity risk are not covered in this study. This study addresses the problem
of liquidity risk faced by the banking sector in Bangladesh.
