Research On Liquidity Management Of China's Commercial Banks

Commercial banks have three principles: the safety, the liquidity and profitability. The liquidity is at a key position in these three principles, The management of liquidity has become an important indicator of the level of operation and management of commercial bank. However, the risk of liquidity has not yet been full)7 understood in China, the management of liquidity is still at a relatively low level, and most of which is mainly qualitative description, quantitative and systematic description are less.Since 1995. there have been a significant change in the financial system, from "loan gap" into a "deposit gap", and the ratio between deposit and loan continued to decline, liquidity surplus has become increasingly evident. By the end of 2008, the central bank has adjust the deposit-reserve ratio 25 times, the phenomenon of excessive liquidity of banking system has eased, and a number of small and medium-sized banks even have been run out of cash in a tight situation. However, the overall capital of banking system is still abundant. Before the subprime crisis, the international financial institutions are still having excessive liquidity, the financial markets fall into a dilemma of liquidity. The implementation of tight monetary policy will become watershed from excessive liquidity to liquidity shortage, This will bring challenges to the management of the liquidity' in commercial banks.Within this context, This article is divided into the introduction and five chapters in all: the first chapter introduce the relevant theory of liquidity management of commercial bank; the second chapter make an analysis of the development of the liquidity management of China's commercial banks and indicator system to measure the liquidity; the third chapter have an empirical study on the current situation of liquidity of China's commercial banks; Chapter IV points the shortcomings of the liquidity management of China's commercial banks as well as experience from home and abroad: Chapter V gives policy proposals .