The global financial crisis reignited concerns regarding the stability and sustainability of banks. Since liquidity creation (LC) is a core output of banks, we examine if the nexus between LC and bank stability is conditional on ESG (environmental, social, and governance) disclosure by banks. Our sample comprises 178 commercial banks (1568 observations) during the period 2010–2019 in the Asia-Pacific region. Using a two-step system GMM estimation, our results document a positive impact of LC on bank stability. Additionally, ESG disclosures positively moderate the stability effect of LC, i.e., higher LC is associated with significantly more enhancement in bank stability for banks that have a higher disclosure of ESG scores compared to banks that have a moderate disclosure. Furthermore, we also provide evidence of variation in the moderating role of ESG disclosures in advanced and emerging economies. Overall, our results recommend that integrating ESG practices into banks' internal processes improves their financial soundness. Additionally, blanket implementation of liquidity regulations might be detrimental to banks’ stability.

全球金融危机再次引发人们对银行稳定性和可持续性的担忧。由于流动性创造（LC）是银行的核心产出，因此我们研究了流动性创造与银行稳定性之间的关系是否以银行的 ESG（环境、社会和治理）披露为条件。我们的样本包括 2010 年至 2019 年期间亚太地区的 178 家商业银行（1568 个观察值）。使用两步系统 GMM 估计，我们的结果证明了 LC 对银行稳定性的积极影响。此外，ESG 披露正向调节 LC 的稳定性效应，即，与披露适度的银行相比，ESG 分数披露较高的银行的 LC 越高，银行稳定性的显着增强就越显着。此外，我们还提供了发达经济体和新兴经济体 ESG 披露调节作用差异的证据。总体而言，我们的研究结果表明，将 ESG 实践纳入银行的内部流程可以提高银行的财务稳健性。此外，全面实施流动性监管可能不利于银行的稳定性。