Abstract:
Purpose: This study is performed with an aim to analyze the impact of liquidity risk management on
the financial and overall performance of the financial institutions focusing on the banking sector of
Pakistan.
Research Methodology: This research thesis study is primarily is secondary in nature. In this
research study secondary data is employed to perform the analysis and interpret the results. This
research thesis study is explanatory in nature. In this research study independent variables are used
to explain the dependent variable. The targeted population of the current research thesis study is
the banking sector of Pakistan that is operating within the geography of Pakistan licensed under the
central bank of Pakistan. In this research study probabilistic random sampling technique is employed
that include the selection of the segment of the population based on certain pre defined
benchmarks. The sample size of the current research thesis study is consisting of top five banks that
are operating in Karachi with significant market share. In this study data is collected for the period of
10 years from 2007 to 2014. In this research study multivariate regression statistical technique is
employed to analyze the impact of selected independent variables on the liquidity risk of the firm.
Findings of the Research: In this research study panel regression statistical technique is employed to
analyze the impact of selected independent variables on the liquidity risk of the firm. It is evident
from the study that there is a significant impact of investment to total assets ratio, banks size and
return on equity ratio on the liquidity of the banking firms in Pakistan. It has further revealed that all
the significant variables inversely determine the liquidity of the selected banks in the country while
there is no significant impact of debt to equity ratio and gross advance to total assets on the
liquidity of the listed banks in Pakistan.
Practical Implications: This research study has value findings to assist in improving the liquidity risk
management practices in the banking sector of Pakistan
