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Risk Disclosure Practice and Liquidity Management of Commercial Banks in Nigeria

Aug 2026 · International Journal of Economics and Financial Management · pp. 99 · 0 citations

Abstract

The study examined the effect of risk disclosure practices on the liquidity management of commercial banks in Nigeria between 2020 and 2023. Specifically, it investigated how credit risk and market risk disclosures influenced the ability of banks to manage liquidity. The study utilized secondary data from 12 listed commercial banks, and employed panel least squares regression to analyze the relationships. Liquidity was measured using the current ratio, while credit risk was proxied by exposure to financial assets and market risk by interest rate gap positions. The regression results revealed that credit risk had a positive and significant impact on liquidity management (coefficient = 2.81E-10, p = 0.0328), while market risk had a negative and significant effect (coefficient = -5.74E-10, p = 0.0477). The model recorded an R-squared value of 0.29, suggesting that 29% of the variation in liquidity management was explained by the independent variables. These findings highlighted the critical role of risk disclosure in shaping sound liquidity strategies within banks. It was recommended that banks enhance the accuracy and consistency of their risk reporting practices and integrate risk-sensitive mechanisms into their liquidity planning to strengthen financial resilience and maintain stakeholder confidence.

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