The determinants of Malaysian commercial banks liquidity / Nurul Afiqah Ozlan

Malaysia is one of the countries that have a modem and comprehensive financial system that continues to develop through time in response to the changing of domestic and international conditions. After financial crisis, Malaysian financial system has throughout some changes and financial reform, then evolve to be more diversified, broad and deeper financial system. Financial system is a mechanism or a framework in which economics exchange can be done. In a modem society, financial system plays an important role in influencing the level economic activities and exchange. Financial system divided into two categories which are financial institutions and financial markets. In this paper will more focus to financial institutions. According to Rose, Kolari (1995), business firm where the principal claims or assets are stocks, bonds and loans instead of real assets are called as financial institution. Sounders, Comett (2007), define financial institutions as an institution that perform the necessary function of transmitting funds from those with surplus fund to those with shortages of funds. Financial institutions can be divided into banking and non - banking system. However this paper will only talk about banking system in area of banking institutions which is commercial banks.