A Study On Liquidity Management Of Commercial Banks In China

As we all know, liquidity management of commercial banks plays a decisive role in the commercial banks’ principle "liquidity, safety and profitability", ensuring sufficient liquidity of commercial banks will be conducive to the promotion of its profitability and the realization of the security. In particular, the financial crisis triggered by the lack of liquidity in2008, has brought us a warning, and also enable us to deepen our knowledge and understanding on the importance of the liquidity management of commercial banks, although on the current situation of liquidity, illiquid phenomenon does not exist, it is undeniable that potential risks of liquidity hidden in commercial banks, besides,with the improvement of the regulatory requirements of the domestic and international regulatory authorities, risk accumulation will lead to serious consequences if not timely and effective management. All requires that we should fully understand the current situation of our liquidity management, and learn from foreign advanced approach to liquidity management to strengthen the study of China’s liquidity management of commercial banks, only in this way can we raise the level of liquidity management.On the foundation of domestic and foreign research, the main content of this paper is as follows:First, the introduction of liquidity management theory of commercial banks, the analysis focuses on the necessity of liquidity management, including the definition of liquidity and liquidity risk, general analysis of the demand and supply of liquidity, measures of liquidity indicators; Secondly, describing the current situation of liquidity through the use of various liquidity measures,finding that the liquidity of commercial banks in China is relatively abundant, but still exists the potential liquidity risks, and then analyzing the potential liquidity risks; Thirdly, in the case of potential liquidity risks, general combing the course and quo of development in liquidity management of China’s commercial banks, summarizing a series of problems and inadequacies; Finally, through the analysis of existing problems, and learning from foreign advanced liquidity management theory, proposing micro-level and macro-level policy recommendations with practical and targeted value.This paper uses a variety of analytical methods to study the liquidity management of commercial banks, mainly including the combination of theoretical analysis and empirical analysis, the complementary methods of qualitative analysis and quantitative analysis to study the liquidity problems of China’s commercial banks, and also uses comparative analysis when measuring the liquidity with various liquidity indicators, in order to give a more objective description of the various types of measurement indicators.