Research On Liquidity Risk Management Of Commercial Banks In China

Liquidity risk refers to the risk that commercial banks can not obtain sufficient fund s in a timely manner at a reasonable cost, which is used to pay the due debts, to fulfill oth er payment obligations, and to meet the needs of other funds to carry out normal business.After the outbreak of the global financial crisis in 2008, commercial banks have been paying more and more attention in the liquidity risk. Basel Committee issued the third edition of the Basel agreement in December 2010. The new edition enhance the status of Liquidity Regulation, which consider it and Capital Regulation as equally important, it proposes two new liquidity regulatory indicators, liquidity coverage ratio and net stable funding ratio, Which makes a more strict and accurate regulation for commercial banks.The liquidity risk management of China’s commercial banks started late, the bank’s own liquidity risk management awareness is relatively weak. Until recent years, liquidity risk management has aroused widespread concern in China’s commercial banks, institutions are still facing serious challenges. In this situation, the liquidity risk management of China’s commercial banks has become a problem worthy of attention and research.This paper reviews the research of domestic and foreign scholars on the liquidity risk of commercial banks. It also analyzes the liquidity risk theory and the relevant regulations of liquidity risk management in Basel III. Based on a large amount of data from 16 commercial banks, by drawing on the experience of liquidity risk management in some foreign countries, this work studies the current situation of liquidity risk management of commercial banks in China, and summarizes the influencing factors of liquidity risk. According to the preliminary study, the following conclusions are drawn:(1) Liquidity coverage ratio and net stable funding ratio as the regulatory indicators of liquidity risk has obvious advantages compared with the loan-to-deposit ratio. (2)Liquidity risk is affected by many factors, such as the asset structure of commercial banks, non-performing loan ratio, capital adequacy ratio and so on. (3) Although the indicators of liquidity regulation in China is not perfect enough, China’s banking regulatory authorities can adapt to the development of international finance and adjust the liquidity regulatory indicators in line with China’s national conditions. (4) The liquidity risk management of commercial banks in our country started late, although it has been developed rapidly in recent years, the challenges faced by China’s commercial banks are still very serious. According to the research conclusion, this paper puts forward the corresponding countermeasures to the liquidity risk management of commercial banks in China from three aspects of index selection, commercial banks and regulatory agencies.