Liquidity mismatch between a bank’s assets and liabilities creates a potential source of fragility in banking sector, which makes them vulnerable to runs (Tesfaye, 2012). However, it is well documented in literatures why such transformation is essential (see Bryant, 1980; Berger and Bouwman, 2014). Financial crisis of 2007-2008 shifted the world’s focus onto the crucial importance of liquidity management within a financial institution as it is liquidity that has triggered the credit crisis.Therefore, the purpose of this study is to identify the liquidity risk determinants that affects liquidity risks in banks. Findings between commercial and Islamic banks are compared in the case of Malaysia.

: liquidity risk, commercial banks, Islamic banks, capital adequacy, liquid assets ratio, non-performing loans, bank size, bank profitability