The Impact of the Volume of Deposits and Facilities and Profits on Bank’s Liquidity an Exploratory Study on Jordanian Commercial Banks

Abstract

Banks liquidity is the main driver of banking operations, and the lack of the sufficient liquidity prevents banks from performing their role as a mediator between money owners and funding seekers, in addition to inability to meet the costs of daily operations including employees’ salaries. And this puts the bank in a risky situation threatening the bank survival. So bank liquidity shortage has consequences damages of social and economic. Where this shortage may deprive the funding seeker from establishing a business or industrial project or etc. of projects, which may contribute in economic development in the country in the one hand, and deprive his family from gaining additional income to improve their livelihood from the other hand.

Therefore, one can find that banks have paying increased attention towards liquidity, and Central Banks Keep on liquidity ratios that banks should keep them. As long as banking deposits facilities, and profits are the actual drives of banks liquidity, this study examines in the effects of these activities on liquidity in Jordanian Commercial banks.