| dc.description.abstract | This study looks at the relation between credit risk and liquidity risk and how those two
factors interact to impact Vietnamese banks' stability. Using data from 20 commercial banks listed
on HOSE and HNX between 2010 and 2022, we perform Pooled OLS, 2SLS, and GMM models
to investigate these relationships. Our results validate a strong positive correlation between credit
risk and liquidity risk, confirming earlier findings that changes in one risk will lead to changes in
the other. But with bank stability proxied by Z-score, only liquidity risk significantly harms bank
stability. This implies that while credit risk is related to liquidity risk, credit risk does not directly
impact stability of the banks. This also suggests that maintaining sufficient liquidity is essential for
guaranteeing bank stability. The study also investigates the effects of some macroeconomic and
bank-specific control variables; however, none is shown to have a major effect on bank stability.
In order to improve risk management procedures and advance financial stability, bank managers
and policymakers in Vietnam can benefit from the insights this research offers. | en_US |
