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To examine the relationship between the term structure of interest rates of sovereign bonds in emerging nations and their macroeconomic indicators, specifically emphasizing its persistence and interaction with inflation, foreign exchange and fiscal conditions.

Adopting the Mean Group Instrumental Variables (MGIV) technique, as proposed by Cui et al. (2020) and Norkute et al. (2021), this study analyzes a monthly panel dataset from nine emerging economies spanning January 2010 to October 2021, totaling 1,278 observations.

The findings reveal significant persistence in both slope and curvature, with a rising yield level linked to the term structure's flattening, while shifts in inflation and exchange rates correlate with its steepening.

Our study is among the few which used an empirically constructed measure of the term structure of interest instead of a theoretical construct. To best our knowledge, we are the first to employ MGIV.

This study aims to investigate the dynamic relationships between profitability, credit risk, liquidity risk and capital in Indonesian banking industry.

The authors use a panel vector autoregression model that incorporates macroeconomic variables: growth, interest rate, foreign exchange. The analysis is based on a monthly panel data set of 88 banks spanning from January 2012 to September 2021, which comprises 10,296 bank-month observations.

Our key findings highlight (i) permanent credit cost and liquidity cost pass through practices, (ii) complementary function of liquidity and capital, (iii) earning management motivated asset write off and (iv) credit risk-liquidity risk neutrality. In addition, the authors observe that the banks demonstrated resilience to macroeconomic shocks.

Our study have shown some interesting dynamic patterns of fundamentals; nevertheless, unified theoretical underpinning of the process is still unavailable. This should be an important future reasearch avenue.

The study brings significant implications for regulatory and supervisory practices aimed at enhancing the financial stability of banks.

We conduct estimation of Indonesian banks system in dynamic perspective and perform impulses responses.

This study aims to cover an important yet largely under-explored topic: the dynamic process of bank liquidity management in a vast developing economy by considering pool of funds hypothesis, signaling hypothesis and risk management hypothesis.

The authors apply the dynamic common correlated effect (DCCE) method with an error correction model format to a long panel datasets of 84 Indonesian banks from January 2003 to August 2019, resulting in 16,800 observations.

The authors obtain convincing evidence of dynamic liquidity management with an error correction mechanism. The time needed to adjust to a liquidity shock ranges from 2.5 to 3.5 months. The empirical results strongly support the pool of funds and signaling hypotheses, whereas risk management motive appears to have secondary importance.

The regulator should also encourage banks to diversify liquidity management to include interbank money market and off-balance-sheet instruments. The current condition shows that bank liquidity management is strongly correlated with intermediation dynamics and thus is contracyclical. Banks could end up with tight liquidity in a booming economy, which would pose a severe risk to their financial standing.

To authors’ knowledge, this study is the first to analyze bank liquidity management behavior empirically using a panel error correction mechanism. Here, the authors also try to combine a practitioner perspective with a scientific one.

A banking system is essential for financial stability, especially economic growth and development. The authors investigate the dynamic linkage of key banking system stability measures, namely, liquidity, capital, profitability, and credit risk. To this end, the authors employ Panel Vector Autoregressive (VAR) to a panel data set of country-level banking system indicators from seven developing countries; from March 2010 to December 2020 (308 country quarter observations). A nation is selected on the basis of similar characteristics large and bank-based economy with the considerably same stage of economic development. The authors find a remarkable resilient feature of the banking system in which both liquidity risk and credit risk appears significant only in the short run (within three quarters). Shocks from both risk sources dissipate quickly, suggesting an internal mechanism is at work. This study provides evidence of how a good performance of financial safety net should be.