Research On Liquidity Risk Management Of The City Commercial Bank

The United States subprime crisis broken out in2007caused hugelosses or even bankruptcy to some American banks, spread to othercountries rapidly, and eventually evolved into a global financial storm.In this crisis, the global financial markets got into liquidity shortdilemma, which brought enormous challenge to the global financialstability and sustainable economic development. Under the background ofhigh inflation pressure and quantitative easing monetary policy inEurope and the United States, the sound monetary policy has been carriedout since2010, that made a severe and complex external macro and internalmicro environment to Chinese commercial banks especially to the citycommercial banks and its liquidity risk management ability was put onthe rack. Because of this, research on commercial banks’ liquidity riskmanagement rapidly became more and more warming again. How to strengthenthe liquidity risk management for the city commercial bank remains opento question.This paper adopts the combination of theoretical and empiricalresearch methods. The liquidity risk management of commercial bank isdescribed in detail from the theory aspect. The liquidity risk of thecity commercial bank is assessed and measured in Chapter4by theempirical research of panel data, where the liquidity risk of theselected city commercial bank is compared with the listed banks. Largenumber of tables and data calculated according to the authoritativestatistic data enhances the rigour, credibility and the persuasion ofthe paper. Meanwhile, related conclusion of strengthening liquidity risk management of the city commercial bank is drawn through comparativeanalysis approach.The possible innovation of this article lies in the empiricalanalysis of the liquidity risk management practice of a highlyrepresentative city commercial bank by using cluster analysis and factoranalysis methods, which has strong theory and practical value andprovides a good case for the liquidity risk management theory ofcommercial banks. At the same time, through the measurement analysis andcomparison of the liquidity risk situation of the city commercial banksand other banks by using large number of data, comprehensiverecommendations is put forward to perfect the city commercial bankliquidity risk management.There are six parts in this paper. The first part is the introduction,in which the research background, the significance of the topics, theresearch situation, the innovation and shortcomings of the paper areintroduced. The second part is a statement on liquidity risk managementof the commercial bank, where the related concepts, analysis of the cause,classification and measurement index of liquidity risk, and the indexof liquidity risk management are mainly introduced. In the third part,the potential liquidity risk of the city commercial bank, the liquidityrisk management situations and problems are analyzed. The fourth partgives assessment and measurement of liquidity risk for the citycommercial bank by the empirical research of panel data, where theliquidity risk of the selected city commercial bank is compared with thelisted banks. In the fifth part, combined with the previous four partsof elaboration and analysis, policy recommendations is put forward toenhance the city commercial bank liquidity risk management. The sixthpart is the conclusion and the prospect part.