University of Tehran Iranian Economic Review 1026-6542 30 2 2026 06 01 The Interrelationships between Bank Leverage, Bank Stability, Credit Risk, and Liquidity Risk: Evidence from Asian-5 Countries 449 479 97071 10.22059/ier.2024.373454.1007957 EN Handy Octavianus Vocational Faculty, Universitas Sumatera Utara, Indonesia. Isfenti Sadalia Vocational Faculty, Universitas Sumatera Utara, Indonesia 0000-0002-4674-1221 Beby Kendida Hasibuan Vocational Faculty, Universitas Sumatera Utara, Indonesia Tona Aurora Lubis Department of Economics, Universitas Jambi, Jambi, Indonesia 0000-0002-5728-0387 Yasmin Chairunisa Muchtar Vocational Faculty, Universitas Sumatera Utara, Indonesia Journal Article 2024 03 03 This study investigates the interrelationships among bank leverage, bank stability, credit risk, and liquidity risk in 93 ASEAN-5 banks between 2010 and 2019, with 930 firm-year observations. The generalized method of moments (GMM) estimator is employed to examine the linkages between bank leverage, bank stability, credit risk, and liquidity risk. The test results show a negative reciprocal relationship between bank leverage and stability. Also, the findings show a negative reciprocal relationship between credit risk and bank leverage. Furthermore, an increase in asset liquidity concentration tends to increase the use of leverage and vice versa. The findings of this study confirm that bank capital decisions have implications for critical concepts in banking, i.e., bank stability, credit risk, and liquidity risk. Additionally, this study proposes a new measurement for determining liquidity concentration. The research will be valuable to banking management and regulators in identifying the interrelationships between essential banking concepts to create soundness in the banking environment. https://ier.ut.ac.ir/article_97071_5ee119b25901a726d0dc2d2e6d5d63d5.pdf