China's Commercial Banks Excess Liquidity

Security,earning and liquidity are the three principle rules in bank operation. The main point of the concept of the liquidity of the commercial bank is the proportion of the assets occupied by the currency. The precondition of realizing the steady management and controlling the risk to honor a check is to maintain the necessary liquidity. With the expanding of the trade surplus of China, the increasing of the funds outstanding for foreign exchange, and the rather quick rising of the currency supply, the liquidity of the commercial bank has changed from the liquidity deficiency of the commercial bank at past to the liquidity surplus of the commercial bank. However, our development level of the finance and the ability of management of the commercial bank cannot effectively manage the change, The liquidity surplus is already the pre-requisite problem waiting to be resolved, in order to control the risk of the management and enhance the profit levels. This article examined the indicators of the liquidity surplus of the commercial bank, analyzed the negative influence of the liquidity surplus, researched the factors bringing the liquidity surplus and thereafter advised a serious of solutions to resolve the liquidity surplus. It is advised that on one hand, the commercial bank needs to improve and advance the management of the liquidity, and on the hand we need to advance the ability of whole finance system to manage the change starting with the improving the environment of the finance.