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The purpose of this paper is to investigate post‐crisis measures banks have adopted in a bid to manage liquidity risk. It is based on the fact that the financial liquidity market was greatly affected during the recent economic turmoil and financial meltdown. During the crisis, liquidity risk management disclosure was crucial for confidence building in market participants.

The study investigates if Basel II pillar 3 disclosures on liquidity risk management are applied by 20 of top 33 world banks. Bank selection is based on information availability, geographic balance and comprehensiveness of the language in which information is provided. This information is searched from the World Wide Web, with a minimum of one hour allocated to “content search”, and indefinite time for “content analyses”. Such content scrutiny is guided by 16 disclosure principles classified in four main categories.

Only 25 per cent of sampled banks provide publicly accessible liquidity risk management information, a clear indication that in the post‐crisis era, many top ranking banks still do not take Basel disclosure norms seriously, especially the February 2008 pre‐crisis warning by the Basel Committee on Banking Supervision.

Bank stakeholders should easily have access to information on liquidity risk management. Banks falling‐short of making such information available might not inspire confidence in market participants in events of financial panic and turmoil. As in the run‐up to the previous financial crisis, if banks are not compelled to explicitly and expressly disclose what measures they adopt in a bid to guarantee stakeholder liquidity, the onset of any financial shake‐up would only precipitate a meltdown. The main limitation of this study is the use of the World Wide Web as the only source of information available to bank stakeholders and/or market participants.

The contribution of this paper to literature can be viewed from the role it plays in investigating post‐crisis measures banks have adopted in a bid to inform stakeholders on their management of liquidity risk.

This research aims to analyze and compare the effectiveness of liquidity risk management of Islamic and conventional banking in Egypt to ascertain which of the two banking systems are performing better.

A sample of six conventional banks (CBs) and two Islamic banks (IBs) in Egypt was selected. Using the liquidity ratios, the investigation involves analyzing the financial statements for the period of 2004-2011. The data were obtained from Bank scope database.

The research found that in Egypt, CBs perform better in terms of liquidity risk management than IBs. The liquidity risk management significant differences between IBs and CBs could be attributed more cash availability to CBs than to IBs, in addition, Egyptian Central Bank regulations on capital and liquidity requirements for IBs disconcert IBs’ performance.

This research facilitates the bankers, academician, scholars and bankers to have an alluded picture about Egyptian banking developments in liquidity risk management. The results can be used by bankers’ policy decision-makers to improve and enhance their consideration for liquidity risk management.

This research covers a period and a country that compares CBs’ and IBs’ liquidity risk management. Its value is attributed to the increasing differentiation between CBs and IBs.

There is not a comprehensive study which covers the evolution of the Turkish Islamic liquidity management landscape so far. The purpose of this study is to show how Turkish PBs have been gradually furnished with the needed liquidity management instruments by the Turkish Treasury, Central Bank of the Republic of Turkey and other related regulatory bodies and to analyze the repercussions of the evolution of Islamic liquidity management on balance sheets of participation banks (PBs) over time. This study also aims to come up with some humble policy recommendations that can improve Islamic liquidity management set up going forward.

The study acknowledges that at least two important elements of liquidity management should be in place on the way of improving the Islamic liquidity management environment. The first one is asset side liquidity or having an adequate amount of high-quality liquid assets. The second one is liability side liquidity, meaning that having access to funding liquidity, especially to central bank liquidity. Historical development of liquidity-related asset-side and liability-side balance sheet items between 2010 and 2020 are analyzed and visualized to demonstrate the progress in the Islamic liquidity management landscape in Turkey.

From 2010 to 2020, Turkish financial authorities made a great effort to get PBs to have more proper liquidity management tools. Turkish authorities have leveled the playing field for PBs via enriching liquidity management tools. Government sukuk issuances has filled the liquid asset gap, improved the liquidity profile of PBs and lessened overall liquidity risk while introduced central bank liquidity facilitates have reduced funding liquidity risk. Islamic liquidity management setup is much more advanced and participation banking system is more resilient than the past, but there are still some missing steps that can further ameliorate the Islamic liquidity management ecosystem in Turkey.

This study is a visualized ratio analysis of PB’s improving liquidity profile in the past 10 years and fills an important gap in terms of displaying the overall Islamic liquidity management landscape in Turkey. Further studies and analysis can be built on this paper on Islamic liquidity management, banking and finance in the future. This paper can be a useful basement for researchers who intend to study on potential impacts of improving the liquidity of PBs on monetary transmission, banking profitability and overall banking system systemic risks.

Three different and interconnected areas should be further improved. These are enriching the diversity of government securities, providing central bank liquidity facilities under various available Islamic contracts and establishing an organized Islamic money market which will facilitate fund flows among various Islamic Financial Institutions (IFIs) and conventional financial institutions. Policymakers should act together, handle arising issues in a holistic manner, design and operationalize these incomplete parts of the puzzle to further optimize the playing field for the IFIs. Thus, there will be a more inclusive and competitive finance industry in which all risks are better managed and resources are more efficiently allocated.

Although various other studies are available on the Turkish Islamic banking industry, there is not such a specific study on Islamic liquidity management of Turkish PBs which makes this study a preliminary and different one. Apart from shedding light on the Turkish journey that has built a sound Islamic liquidity management infrastructure in the past 10 year, this study also shows an exemplary country experience in developing a more inclusive and robust financial ecosystem. This paper also contributes to financial development and inclusion literature as a policy paper.

The purpose of this paper is to analyze and evaluate the present liquidity management in the Indonesian Islamic banking industry. It also proposes an integrated and comprehensive program of liquidity risk management which captures and assimilates the whole aspects of the issue and brings the industry into a better way of managing liquidity risk based on sharia principles.

The paper first examines the organizational structure of Islamic banks and Islamic windows in managing liquidity. Second, it investigates the characteristics of the depositors, their investment behaviors and expectations followed by the banks efforts and policies to manage the liquidity. Then, it identifies the potential liquidity problems and Islamic liquid instruments. Finally, it proposes an integrated and comprehensive program for managing liquidity.

The paper suggests institutional deepening; restructuring the liquidity management on the liability and asset sides; and revitalizing the usage of the Islamic liquid instruments, in the integrated program.

This is believed to be the first paper to propose a liquidity management improvement program in the Indonesian Islamic banking industry.

The credit crunch of 2008 and recent COVID-19 influences underscored the importance of liquidity and credit risk management in businesses and financial institutions. The purpose of this study is to investigate the impact of liquidity risk and credit risk management on accounting and market performances of banks operating in the Middle East and North Africa (MENA) region.

This study uses a panel data regression analysis on a sample of 51 listed commercial banks operating in 10 MENA countries during the period 2010–2018.

The results show that credit risk management does not affect the accounting performance of banks, while it has a non-linear, convex relationship with market performance. Surprisingly, liquidity risk management is not a significant driver for either performance measure in studied banks. However, when a bank combines credit risk management with liquidity risk management efforts, liquidity risk management actions return significant results on both performances, illustrated by an inverted U-shaped relationship. In addition, this study examines the joint impact of both risks on bank performance. This study reveals that accounting and market performances are differently affected by joint risk management efforts. Their impact depends on the combination of risk management ratios upon which banks choose to focus their efforts.

The findings help bankers and regulators further consider non-linearities and offer them new tools for managing the impact of credit and liquidity risk interactions towards achieving more financial stability.

These results contribute to traditional banking in offering bankers and regulators new tools for managing the impact of credit and liquidity risk interactions on bank performance.

The purpose of this paper is to assess liquidity risk management (LRM) practices in Indonesian Islamic banking industry during the period 2000‐2007.

The paper constructs the LRM index (100 scale) which is composed of individual index of asset side; liability side; LRM policies; and the overall LRM index.

The index produces a “good” grade for the liquidity management practices in the Indonesian Islamic banking industry, represented by three Islamic banks which capture 82 percent of the total market share of the industry. However, the breakdown of the index of every Islamic bank suggests various achievements.

It is found that the practices of LRM are not optimal yet based on some considerations explained in this paper. Further progressive actions have to be taken by the regulators and all industry's players to improve the LRM practices.

To the best of the author's knowledge, this is the first paper trying to assess how good the LRM in Indonesian Islamic banking is.

The management of liquidity has always been seen as a critical but often ignored issue in finance. Despite the abundance of studies on liquidity management, these studies mainly focus on developed countries and on large firms. Liquidity is critical for the small firm but studies on liquidity management in small and medium enterprises (SMEs) are lacking. The purpose of this paper is to examine the firm-level determinants of liquidity of SMEs in Malaysia.

Data are collected for a total of 986 small firms in Malaysia from 2011 to 2014, resulting in a total of 2,683 observations. Firm-specific variables and the effect of the economy are considered as the possible determinants of liquidity. Ordinary least squares (OLS) regression analysis with standard errors adjusted for firm-level clustering and quantile regression analysis are used for this purpose.

Analysis using OLS regression technique indicates that a firm’s profitability, its growth, asset tangibility, size, age and firm status are significant factors in influencing its liquidity decision. Leverage and economic condition are not found to have any significant influence on liquidity. However, quantile regression analysis provides a different picture especially for SMEs with liquidity at the quantile levels of θ=0.10 and 0.90. At θ=0.10, only profitability, tangibility and firm status are significant, while at θ=0.90, tangibility, size, firm status and, to some extent, age are significant in influencing liquidity levels.

To the author’s knowledge, this is the first study analyzing the liquidity decision of SMEs in an emerging market such as Malaysia. Most studies on liquidity management of SMEs are focused on developed countries due to data availability but these studies are also only a handful. Additionally, this study uses quantile regression analysis which highlights the need to analyze financial decisions at different levels rather than at the aggregate level as done in OLS regression analysis.

This paper aims to develop an instrument that helps in managing liquidity. Liquidity is one of the most critical issues to be considered by the financial management of the business firms to meet its financial obligations. It is more vital for banks because of the liquid nature of its assets and liabilities, along with the fact that the confidence in the bank and degree of risk depends heavily on liquidity as an indicator of its wellbeing. Islamic banks (IBs) look at the liquidity issue from the same side as the traditional banks. IBs – the most apparent Islamic financial institution – suffered from the problem of not benefiting from the lender of last resort that Central Banks (CBs) offer to traditional banks because IBs cannot borrow from the CBs at interest. The experience of Institution(s) offering Islamic Financial Services[1] (IIFS) regarding the establishment of Islamic money markets did not show a tangible success instead of the early studies done by some scholars. In spite of the rich experience of some countries in creating new money market instruments or configuration of the interest-based ones according to Islamic - Sharī’ah[2], the designs of these instruments have many limitations in terms of their tradability and flexibility, restricting their use for open-market operations by CBs.

The purpose of calculating the time weighted debt units (TWDUs) is to find the equivalent amount of money that the supplier can borrow to the lender in the future for a maturity that differs from the first credit contract. It is a swap between an amount of credit for a particular period of time and another amount for another period. The scheme are called traditionally as reciprocal (mutual) loans, reciprocal (mutual) deposits, swapped conditional loans and “I lend you, provided you lend me” (Hammad, 2010). It is also well known in Pakistan as time multiple counter loan (TMCL), and known within some Arabic IBs as specks (Nomar = numbers) system. This contract will be called the reciprocal loans in the current paper.

The current paper represents a blue print of suggested money market instrument (scheme) that is based on the idea of Al Qardh El Hasan (interest-free loan) – called TWDUs. This instrument does not promise any revenue for the supplier and no charge for the lender.

The suggested model is known in traditional and contemporary writings of Islamic economists and - Sharī’ah scholars. It is accepted by many - Sharī’ah Boards in IBs (Merah, 2011) and was accepted by the Council of Islamic Ideology in Pakistan in 1980 through the TMCL. Despite that, it is still not discussed in depth by international - Sharī’ah boards as the International Islamic Fiqh Academy – in addition to the wide spread of opponent viewpoint that considers this contract as a kind of riba.

TWDUs is presumed to help IBs and other IIFS to add more flexibility in liquidity management in the side of risk management[3] (represented by the potential loss to IIFS arising from their inability either to meet their obligations or to fund increases in assets as they fall due without incurring unacceptable costs or losses) in addition to avoiding the case of hoarding surplus funds in the short term. Also, the suggested instrument will not be exclusive to IBs or IIFS; it can be developed to be used at a later stage by them as a mean of overdraft between IBs and their clients. Moreover, beside its viability to help in liquidity management for other firms in business sector (non-financial) or government agencies in liquidity management, TWDUs look for Islamic financial theory as an alternative to the traditional financial theory that is based on interest. Moreover, TWDUs is expected to play an important role in monetary policy in a totally Islamic financial system or even in a mixed one (Islamic and capitalistic).

This study aims to examine the theoretical foundations for multivariate portfolio optimization algorithms under illiquid market conditions. In this study, special emphasis is devoted to the application of a risk-engine, which is based on the contemporary concept of liquidity-adjusted value-at-risk (LVaR), to multivariate optimization of investment portfolios.

This paper examines the modeling parameters of LVaR technique under event market settings and discusses how to integrate asset liquidity risk into LVaR models. Finally, the authors discuss scenario optimization algorithms for the assessment of structured investment portfolios and present a detailed operational methodology for computer programming purposes and prospective research design with the backing of a graphical flowchart.

To that end, the portfolio/risk manager can specify different closeout horizons and dependence measures and calculate the necessary LVaR and resulting investable portfolios. In addition, portfolio managers can compare the return/risk ratio and asset allocation of obtained investable portfolios with different liquidation horizons in relation to the conventional Markowitz´s mean-variance approach.

The examined optimization algorithms and modeling techniques have important practical applications for portfolio management and risk assessment, and can have many uses within machine learning and artificial intelligence, expert systems and smart financial applications, financial technology (FinTech), and within big data environments. In addition, it provide key real-world implications for portfolio/risk managers, treasury directors, risk management executives, policymakers and financial regulators to comply with the requirements of Basel III best practices on liquidly risk.

The proposed optimization algorithms can aid in advancing portfolios selection and management in financial markets by assessing investable portfolios subject to meaningful operational and financial constraints. Furthermore, the robust risk-algorithms and portfolio optimization techniques can aid in solving some real-world dilemmas under stressed and adverse market conditions, such as the effect of liquidity when it dries up in financial and commodity markets, the impact of correlations factors when there is a switching in their signs and the integration of the influence of the nonlinear and non-normal distribution of assets’ returns in portfolio optimization and management.

This study empirically examines the relation between profitability and liquidity, as measured by current ratio and cash gap (cash conversion cycle) on a sample of joint stock companies in Saudi Arabia. Using correlation and regression analysis the study found significant negative relation between the firm’s profitability and its liquidity level, as measured by current ratio. This relationship is more evident in firms with high current ratios and longer cash conversion cycles. At the industry level, however, the study found that the cash conversion cycle or the cash gap is of more importance as a measure of liquidity than current ratio that affects profitability. The size variable is also found to have significant effect on profitability at the industry level. Finally, the results are stable over the period under study.