| The problem of liquidity risk existing in the commercial banks of China has not raised the wide concern among people for a long time due to having the national credit as the powerful backing. But with steady transition of financial system from planned economy to market economy, and further in-depth of the economic and financial reform, at the moment of experiencing rapid increase in quantity, the commercial banks of our country start to gradually expose many existing problems in quality, among which abnormal assets expansion, poor management & administration, unitary assets type and narrow fund-raising channel, etc. have aggravated the liquidity risk of our commercial banks to varying degrees. The bankruptcy of Hainan Development Bank in June, 1998 awoke us with a surprise that " In China, bank may also go into bankruptcy someday". Furthermore, rush for withdrawing savings, which happened in our bank Shenyang Branch in middle of March, 1999, makes us deeply feel that the liquidity risk is not far away from us.Looking back at the status of liquidity risk management in our commercial banks, there still exit many deficiencies although government authorities, the financial and academic circles have taken various measures to solve the financial problems and dissipate the financial risk in recent years. The banks' external management environment is to be improved and their internal controlling mechanism is also to be developed soundly. The liquidity risk management in commercial banks is still on the initial stage. In the difficult situation that our commercial banks are suffering from steady increase of abnormal assets and decrease of management efficiency, the liquidity risk of commercial banks will have seriously destructive effect on the entire national financial system and even the safety operation of national economy unless the government authorities, the people's bank and all the commercial banks effectively take the preventive and dissipating measures. As a banking planner, I can not help worrying about the liquidity risk of the commercial banks, which impels me to probe the root source of the problem and seek an effective solution. So, I choose 'Research on the Liquidity Risk of the Commercial Banks in Our Country" as the subject with the aim to probe a new idea to strengthen the liquidity risk management of our commercial banks in such a specific economic and financial circumstances of China by learning from the western theories on liquidity risk management so as to make my own contributions to improve the management and administration level of our commercial banks.II. Main ContentsHow to manage the liquidity risk is a problem that the commercial banks must face anytime, because liquidity is the life line of a commercial bank and the basis for the normal development of all the management activities. Once a commercial bank loses liquidity and suffers the liquidity risk, it will seriously destroy the bank credit, aggravating the entire management risk, worsening the management environment, and leading to huge losses and even bankruptcy. Just because the liquidity risk forms a great threat on the survival and development of the commercial banks, the liquidity risk management has always been an important part of business management of the commercial banks.The liquidity of a bank refers to the ability of the bank to timely meet various capital demands and recover the capital. It is reflected in assets and liabilities: the assets liquidity refers to the ability of the bank-owned assets to pay or to realize at any time without depreciation, while the liabilities liquidity refers to the ability of the bank to get the required capital at the reasonable cost at any time. The liquidity risk refers to the possibility that the commercial bank incurs losses in the aspect of profitability and is threatened in the aspect of survival due to having insufficient cash to pay the debt, to ensure the customers to withdraw savings and to meet the needs of loan. Due to the uncertainty of t... |
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