WPS n° 2/2015 - The determinants of banks' request for refinancing from the central bank
N° DER/15/02
Abstract :
The objective of this study is to identify the factors explaining the refinancing demand of banks' liquidity at the BCEAO. The results obtained from a model using an unbalanced panel data estimated by Least Squares Dummmy Variable (LSDV) estimation show that the demand of refinancement is motivated largely by domestic lending to the economy in the short, medium and long terms, and also by the acquisition of government securities. The differential between government securities and the marginal lending rates of the Central Bank, and economic growth also positively affect the banks' liquidity demand. However, the strengthening of bank capital and deposits at the counters as well as the increase in the reserves affect negatively the banks' refinancing demand.
Keywords : liquidity, government securities, LSDV
JEL code : E58, E44, C23