Cover IMF Working Papers
Lebanon-Determinants of Commercial Bank Deposits in a Regional Financial Center
Author: Mr. Harald Finger and Mr. Heiko Hesse
Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 195
Language:
English
Publication Date:
01 Sep 2009
DOI:
https://doi.org/10.5089/9781451873429.001
ISBN:
9781451873429
ISSN:
1018-5941
Pages:
21
Keywords:
WP; deposit; bank; commercial bank; Lebanon; banking system; Deposits; deposit demand; money demand; panel regressions; regional financial center; VECM; GCC GDP coefficient; non-resident deposit; asset quality; bank data; bank level; deposit inflow; bank assets; factors GCC GDP growth; GCC GDP growth; bank Level; bank profit; Bank deposits; Cyclical indicators; Commercial banks; Oil prices; Vector error correction models; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper empirically examines the demand for commercial bank deposits in Lebanon, a regional financial center. With Lebanon's high fiscal deficits financed largely by domestic commercial banks that rely on deposit funding, deposit growth is a key variable to assess government financing conditions. At the macro level, we find that domestic factors such as economic activity, prices, and the interest differential between the Lebanese pound and the U.S. dollar are significant in explaining deposit demand, as are external factors such as advanced economy economic and financial conditions and variables proxying the availability of funds from the Gulf. Impulse response functions and variance decomposition analyses underscore the relative importance of the external variables. At the micro level, we find that in addition, bank-specific variables, such as the perceived riskiness of individual banks, their liquidity buffers, loan exposure, and interest margins, bear a significant influence on the demand for deposits.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund