Research On Liquidity Risk Management Of China's City Commercial Banks

With the liquidity problem of financial institutions around the world constantly triggering systemic financial crises,liquidity risk has increasingly become the focus of scholars' attention and research.Under the background of China's financial deleverage,since 2017,various new banking supervision policies have been released frequently.Financial supervision is in the stage of strong supervision to reduce financial risks and fully expose financial risks.At present,the growth of China's commercial bank deposits is weak,the market liquidity is tight overall,and small and medium-sized banking financial institutions,especially city commercial banks,are more vulnerable to liquidity shocks.In this situation,it is important for the managers of city commercial banks to use professional liquidity risk management methods for risk measurement and monitoring.A comprehensive identification of liquidity risks,effective evaluation,and positive response can reduce the risk level and enhance the competitiveness of banks.In the current research on the liquidity risk measurement of commercial banks,the measurement of liquidity risk mostly uses Va R,ES measurement method and gap analysis method.The complexity of these methods makes the use of liquidity ratio,loan-to-deposit ratio,etc.,which are easy to measure.Under the traditional liquidity risk monitoring system,each indicator which cannot be added directly is also not conducive to the measurement of system liquidity risk.In addition,the research on the liquidity risk of commercial banks mostly takes the joint-stock commercial banks as the analysis object,and the research on the mobility of urban commercial banks is less.This paper adopts the case study method,takes Ningbo Bank as the research object,and introduces the liquidity mismatch index to study the current status and characteristics of Ningbo Bank's liquidity risk management.Combined with the actual situation of liquidity risk management of Ningbo Bank and the liquidity characteristics of China's urban commercial banks,it puts forward feasible suggestions for liquidity risk identification,risk measurement and risk response to improve the liquidity risk management system of Ningbo Bank for other city commercial banks.Liquidity risk management provides a reference.Finally,the following five conclusions are drawn:(1)Under the background of strict liquidity supervision,the city commercial banks began to adjust the structure and quality of assets and liabilities to optimize the liquidity level,but the new liquidity monitoring indicators still face adjustment pressure,and the city commercial banks need to constantly Improve the liquidity management system according to regulatory requirements.(2)The problem of liquidity management faced by city commercial banks lies mainly in the limitation of business scope.The limited scope of storage makes the deposit growth weak.The concentration of business objects and the group effect between small and medium banks are likely to cause regional systemic risks.While maintaining local customers,city commercial banks should increase cooperation between small and medium-sized banks to achieve cross-regional operations and enhance capital strength.(3)The liquidity of Bank of Ningbo has performed well in the industry.The main business risks are business strategy risk,horizontal competition risk and business innovation risk.The regional business characteristics of the city commercial banks also face the same type of commercial risk.In the liquidity management,Ningbo Bank needs to prevent the local economy from being affected by the impact of domestic and international markets to create regional liquidity risks.(4)The liquidity mismatch index reflected by the Liquidity Mismatch Index(LMI)basically conforms to the development of Ningbo Bank's operation,indicating that it is reasonable to measure the liquidity risk of commercial banks by using the liquidity mismatch index,which can continuously optimize the flow.Sexual mismatch calculation method to improve China's liquidity monitoring indicators.(5)The liquidity of the five major banks and the rural commercial banks is relatively stable.The liquidity mismatch problem is mainly concentrated in joint-stock commercial banks and urban commercial banks.The regulatory authorities should strengthen the attention and guidance for the liquidity management of small and medium-sized banks.The main innovations of the article are as follows:(1)The problem of liquidity mismatch is mainly concentrated in joint-stock banks and city commercial banks.Due to the limitation of the business scope,the city commercial bank has limited deposits,which makes the deposit growth weak.The concentration of business objects and the group effect between small and medium banks are likely to cause regional systemic risks.This paper takes urban commercial banks as the research object and tries to solve the problem of the construction of the current liquidity management system of commercial banks.(2)Constructing a liquidity mismatch index(LMI)to measure the liquidity of a commercial bank can reflect the rationality of the bank's capital investment and resource allocation.In contrast,it can more comprehensively measure the liquidity surplus of commercial banks.The construction of LMI also provides ideas for the measurement of liquidity risk of commercial banking system,and helps to improve China's macro-prudential management indicators.(3)The degree of marketization will deepen the political resources advantage of the lower-city commercial banks will be weakened.Based on this,it is proposed that the city commercial banks should improve the shareholding structure,strengthen inter-bank cooperation to achieve cross-regional management,and avoid the collective risk brought by the group effect.Risk,and strive to propose forward-looking policy recommendations for the management of liquidity risk in urban commercial banks.Due to the author's level of knowledge and limited time and energy,this paper also has the following shortcomings:(1)Due to the availability of statistical data,relevant information on prevention and response measures for liquidity risks within Ningbo Bank is not easy to find,and is related between different banks.The similarities and differences between liquidity risk indicators are not comprehensive enough,and the conclusions may be regional or one-sided,and the conclusions and countermeasures need to be targeted and in-depth.(2)The calculation of the Liquidity Mismatch Index(LMI)needs to be weighted separately for the assets and liabilities of the bank's balance sheet,although in the process of setting the weight,the conversion ratio of the new liquidity assets to liquid assets and liabilities is referenced.The agreement and the related literature on the adjustment of the balance of assets and liabilities,but there is still some subjectivity.