The Impact of Credit and Liquidity Risk on Commercial Banks’ Stability in Tanzania During Covid-19 Pandemic:

Abstract

The financial crisis during the COVID-19 has posed a significant threat to the banks’ stability in developing economies. Therefore, this paper intends to investigate the impact of credit and liquidity risk on the stability of 10 large commercial banks in Tanzania during the COVID 19 pandemic from 2018 to 2021. The findings revealed that credit and liquidity risk were two significant factors influencing banks’ stability during the pandemic, and the interaction of these risks contributed to banks’ instability. The findings give the bank managers and regulatory authorities a better and clear understanding of liquidity and credit risk management. The study findings support the framework of Basel III which emphasizes the role of joint bank risk management.