Paper Title
Liquidity Risk in Dual Banking System: Empirical Evidence from Saudi Arabia

Abstract
This paper examines the liquidity risk in Islamic and conventional banks (henceforth IBs and CBs) by looking at the impact of bank specific variables on three complementary liquidity risk measures in Saudi banking system where the two types of banks operate. Applying the least squares dummy variable corrected (LSDVC) approach over the period 2008Q1-2018Q2, our analysis suggests that liquidity risk indicators of IBs have been affected differently than those of CBs. In terms of liquidity ratio indicator, IBs with stronger capital possibly hold fewer liquid assets as a proportion of their short-term liabilities than small ones. Moreover, we show opposite behavior of the two types of banks for capital ratio and ROA. If CBs are more capitalized and realizing more rentability on assets, they have more liquidity ratio than IBs with the same characteristics. Keywords - Liquidity Risk, Islamic Banks, Conventional Banks, LSDVC Approach