Research On The Excess Liquidity In Commercial Banks Of Our Country

The liquidity is always one of the main topics in commercial bank management. Liquidity, profitability and security are well known as the "triple principles". Nowadays, many facts show that there is excess liquidity in our country's banking sector. And excess liquidity is becoming the first problem for commercial banks to solve, making the cost of commercial bank management increasing and blocking the management strategy transformation of the commercial banks. Under the background of finance sector opening, China's commercial banks are challenged by the excellent foreign banks. So how to solve the excess liquidity becomes a really important problem which governments, banks and research agents have to work on.In the theory part of this thesis and in order to build strong foundation, it reviews and summarizes the research results of liquidity in banking, especially the banking liquidity crisis theories. The thesis points out that, excess liquidity in banking is uneconomical. In the following, many evidences are presented to prove the existing of excess liquidity. Based on this, the thesis analyzes the bad influences on banks excess liquidity will make. To attach more importance to excess liquidity, the finance crisis is presented which took place in the early years of 1990s in Japan.When analyzing the reasons of excess liquidity, on behalf of commercial banks, the thesis analyzes the roles that the micro and macro economic facts that may cause excess liquidity. Through the empirical researches, we would say that the excess liquidity is more like a macro problem. The direct reason and main reason for excess liquidity in bank system is the huge foreign exchange accumulated by the trade surplus and the appreciation anticipation of RMB. Based on the investment and saving model, the thesis makes a conclusion that the high rate of saving in our country, the surplus product ability and the structure of trade surplus which is contributed mainly by foreign investment are the deeper reasons.According to the conclusions of theory analysis and empirical researches, in order to cure excess liquidity, the government should take a series of policies. For this research is on behalf of the commercial banks, most advises are for commercial banks. The thesis points out that, constrained by the economy institutions and environment, commercial banks have to rethink the inner liquidity manage systems, and should build a more sophisticated liquidity management system. After commercial banks know exactly the demand and supply of liquidity, they have to change the old way of their fund management and try to find new fields to invest their excess money, such as providing more loans to middle and small enterprises without amplifying risks, and also providing more loans to farmers. Other than that, in order to manifold the fund operation ways and thus eliminate excess liquidity, commercial banks should try to explore the integration operation mechanism, as the integration operation has been a trend without a doubt.