The Challenges Of The New Normal On China’s Commercial Banks’ Liquidity Risk Management

The new normal for economy is put forward by Present Xi firstly on May 2014 as a new economic terms. Internationally, the new normal refers to the global economic crisis after the comprehensive description of the social and economic conditions. In China, the new normal is endowed with new meanings, referring to the effects of various policies on the financial crisis and new changes of new economic status both at home and abroad. As China’s economy enters the new normal, the economy of the whole society presents some new characteristics such as the slower economic growth, economic structure transformation, economic system reform and the economic policy change, etc.Finance is the core of modern economic society. Without the financial markets’ run effectively, the development of the real economy will lack of funds support. Governor Zhou Xiaochuan of the People’s Bank of China said that, In the new period we have to pay attention to the changes of the various factors affecting the financial industry development. In other words, we must pay attention to the change of the financial ecology. The financial ecology is put forward for the first time. The new normal economic development will inevitably bring financial new normal. As the banking system is an important part of the financial system, economic new normal will inevitably impact on commercial banks. On this basis, this paper studies what challenges the economic new normal brings to the banks liquidity risk management. After the analysis of the new challenges, the paper studies how China’s commercial bank liquidity management is not adaptive to the challenge of the new analysis. Then the paper will put out the current liquidity risk management experience in the world. Finally we can put forward policy suggestions to our country commercial bank liquidity risk management.Liquidity risk is one of the most important financial risks, which is concealment and infectious. As China’s economy enters the new normal, the increasingly complex business environments bring the commercial bank liquidity risk management a lot of pressure. This article mainly analyze how the new normal economic challenge influence our country commercial bank liquidity risk management. These five aspects are the interest rate liberalization, the Internet finance, slower growth, regulatory strengthening and the development of capital markets. This article analyze the new normal economic’ influence on commercial banks’ assets and liabilities to analyze the challenges of the new normal. At the same time, we also should study the status of China’s liquidity risk management is adapt to this situation or not. Therefore, this article study the inadaptability from two aspects, our country commercial bank liquidity risk and liquidity risk management. Since then, this paper summarizes the good experience of international liquidity risk management under the new economic conditions. Including three aspects:one, the western countries and emerging countries commercial Banks liquidity risk management experience; Second, the international liquidity risk management processes; third, the new trend of international liquidity risk management under the condition of new economy.Through the above theoretical research and description analysis, and combined with international experience, the paper finally puts forward the policy advice on our country commercial bank liquidity risk management, including the following five aspects. Firstly, the commercial banks must strengthen the risk awareness and promote management initiative. Secondly, banks should broaden the coverage of liquidity risk management. Thirdly, the measures of the liquidity risk management must be rich and the management level must be improved. Fourthly, the commercial banks must have business innovation to reduce liquidity risk. Lastly, the banks should accord with the trend of the management and improve management.