Date of Award
Doctor of Business Administration (DBA)
Jack Welch College of Business
Dr. Lucjan T. Orlowski
This paper investigates the effects of Basel III’s liquidity metrics on profitability and stability on a subset of U.S banks from 2002 to 2014. The profitability and stability of each of these banks were calculated under the scenario of shifting 1% of its overall assets from illiquid to liquid. The empirical findings demonstrate a negative relationship between holding higher liquidity and bank profitability. It finds that this negative relationship is disproportionate across the bank classes with savings banks losing profitability at almost twice the rate as national banks. Additionally, stability of savings banks is more adversely affected than of national banks.
E44, G18, G21
Mundt, C. (2017). Effects of the Basel III liquidity risk metrics on U.S. bank performance and stability. Jack Welch College of Business dissertation. Sacred Heart University, Fairfield, CT.
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