Research On The Liquidity Risk Management Of Industrial Bank’s Inter Bank Business

The three main components of China’s financial industry are banking,insurance and securities.Banks play an important role in stable economic development.With the continuous development of interest rate marketization and financial technology,the competition among banks is becoming increasingly fierce.Commercial banks can no longer just maintain the traditional business model.Because it is difficult to form a competitive advantage only depending on the difference between deposits and loans.Inter bank business is a new perspective and direction for the transformation and development of commercial banks.If the risk management of inter-bank business is not in place,the liquidity risk of commercial banks may increase.In June 2013,Industrial Bank,due to the default of Everbright Bank,formed hundreds of billions of bad debts,and the interbank lending rate increased significantly,which caused the liquidity crisis of the banking industry and the panic of the entire capital market.In May 2019,Baoshang Bank was taken over by the People’s Bank of China and the CBRC.The important reason is that the interbank business expanded wantonly.The interbank debt scale reached 300 billion yuan,accounting for57.69% of the total debt,greatly increasing the liquidity risk.In February 2021,the Contractor Bank was adjudicated bankrupt by the court.Therefore,this paper studies the liquidity risk management of commercial banks’ interbank business.Through the analysis of the current situation of inter-bank business risk management,the existing problems are found.This paper aims to help commercial banks achieve the balance between income and risk when conducting inter-bank business,and provide suggestions for the stable development of inter-bank business.This paper chooses Industrial Bank as the case study object.This is because Industrial Bank is known as the king of the industry.Industrial Bank’s interbank business operation motivation,development stage,business types and the current interbank business liquidity risk management system.Furthermore,analyze how Industrial Bank’s interbank business affects liquidity risk management and find out the problems in interbank business’ s liquidity risk management Finally,based on the above analysis,propose targeted countermeasures and suggestions for the inter-bank liquidity risk management of Industrial Bank.In addition,we found problems in the liquidity risk management of Industrial Bank’s interbank business and put forward targeted suggestions.Through case analysis,four problems were found in the process of liquidity risk management of Industrial Bank’s interbank business.First,the scale of inter-bank liabilities is too large.The second is term mismatch.Third,violations occur frequently,and there is a lack of risk event database.Fourth,the intelligent risk control system is not perfect.At the same time,the study found that the liquidity risk brought by inter-bank business to Industrial Bank could be effectively mitigated from four aspects:adjusting and improving the scale and structure of inter-bank business,controlling the degree of mismatch,preventing violations,and promoting the development and application of intelligent risk control systems.The research contribution of this paper is to deeply explore the problems and causes in the inter-bank business liquidity risk management,propose targeted measures and suggestions,and hope to achieve the effect of point to area,and point out the optimization direction for the further improvement of the inter-bank business liquidity risk management system of commercial banks.