The Research Of Commercial Bank Liquidity Stress Testing Methods

In the development of commercial banks, commercial banks have been stickingto their so-called "three principles", namely, liquidity, risk and safety. In the dailymanagement, it is not just sticking to the principle of commercial banks but also themanagement target of commercial banks. With the continuous development of China’sfinancial markets, liquidity management is more and more important. The commercialbank liquidity be acquired at any time with the right price is liquidity managementgoal. Because of the importance of liquidity, many scholars studied the liquiditypressure test, putting forward some methods and also obtaining some usefulconclusions. But due to various reasons, the existing liquid pressure test methods havesome shortcomings.This paper describes the background of commercial bank’s liquidity stress tests,as well as introducing the past theories. Second, introduces the history of mobility,then summaries commercial bank liquidity stress testing methods, as well as a varietyof methods to implement steps. By using the case---Iceland Landsbanki íslands hfBank, introduce the2008bank collapse causes and consequences of the financialcrisis, indicating deficiencies in its liquidity stress testing methods. Finally, some ofthe recommendations and proposals for improvement, then introduces the currentsituation of China’s commercial banks stress test briefly, and proposes an improvedmethod.The main contribution of this paper: in this paper, by using combining the theoryand case analysis,using the Icelandic Landsbanki Islands hf bank as an example,introduces the main steps using stress testing, and analysis the deficiencies, at lastsummarizes the direction that can improve, at the same time puts forward relevantopinions for the commercial bank of China. Only doing well in liquidity management,commercial banks can deal with the current complicated and changeable worldmarket...