scholarly journals Issues of improving the mechanisms for regulating the liquidity of commercial banks in developed countries

2021 ◽  
Vol 4 (1) ◽  
Author(s):  
Boburjon Bakhriddinovich Izbosarov
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Information Infrastructure ◽  
Developed Countries ◽  
Management Mechanism ◽  
Liquidity Management ◽  
Advantages And Disadvantages ◽  
Regulation Mechanisms ◽  
Necessary And Sufficient ◽  
Liquidity Regulation

This article discusses the improvement of liquidity regulation mechanisms for commercial banks in developed countries.  This article will consider such concepts as “liquidity”, “liquidity management”, “liquidity management mechanism”, and the existing approaches to its definition, as well as the bank’s information infrastructure, which is necessary and sufficient for the implementation of effective liquidity management. It should be noted that the emphasis will be placed on the aspects and approaches to liquidity management directly by the commercial bank itself, and not on prudential or other norms aimed at assessing the risk of a bank losing its liquidity. The purpose of this article is to consider the existing approaches to liquidity management, their advantages and disadvantages, for possible use in the future as basic ones for the planned study.

Impact of liquidity on profitability in Nepalese Commercial Bank

Patan Pragya ◽  
2019 ◽  
Vol 5 (1) ◽  
pp. 180-187
Author(s):  
Shiva Prasad Pokharel
Keyword(s):  
Monetary Policy ◽  
Commercial Bank ◽  
Significant Relationship ◽  
Commercial Banks ◽  
Development Bank ◽  
Liquidity Management ◽  
Agriculture Development

This study explores the influence of liquidity on the profitability in the Nepalese commercial banks. 5 commercial banks in Nepal; Agriculture Development Bank, Everest Bank, Prime Commercial Bank, Sunrise Bank and Citizens Bank International are randomly selected among 28 commercial banks of Nepal as a sample and analyzed for the current study over the period 2010/11 to 2016/17 AD. Since liquidity management can increase the bank’s profitability. the study has examined their liquidity management as well as profitability positions using various statistical and financial tools. The article indicates largely zigzag trend of average profitability of commercial banks, although the trend of liquidity ratios of the bank is unstable. The research concluded that bank’s liquidity ratios have below the prescribed standard. Similarly CRR is extremely heavy than prescribed by monetary policy 2016/17. The CRR and IGSCA are positively correlated with ROA while CRR and CBBISD are inversely correlated with ROA. In case of liquidity-ROE Relation, CR is inversely correlated to ROE but all other ratios (CRR, CBBISD and IGSCA) are positively correlated with ROE. It also has reported there is significant relationship between liquidity ratios with profitability, except between IGSCA and ROA.

Impact of liquidity on banks’ productivity: A study on selected commercial banks in Bangladesh

IIUC Studies ◽  
2020 ◽  
Vol 15 ◽  
pp. 59-71
Author(s):  
Nazneen Jahan Chaudhury
Keyword(s):  
Commercial Bank ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Secondary Data ◽  
Stock Exchanges ◽  
Liquidity Management ◽  
Global Standards ◽  
Time Period

Financial institutions are the directories responsible for allocating liquidity to its most productive uses. A bank’s liquid assets are significant not only for defending a bank against definite kinds of distresses but also increasing its productivity. This study analyzes the influence of liquidity on banks’ productivity throughout the time period 2007-2016. The study is curbed to five Commercial Banks enlisted under Stock Exchanges in Bangladesh. Here the researcher has taken only the secondary data into account. The outcomes of the study substantiate the hypothesis that Liquidity and Productivity are both positively and significantly correlated. The liquidity management of bank is the administration of fund flowing into and out of the bank in a way that will maintain profitability, solvency, liquidity and productivity. The management of a commercial bank ought to be efficient in order to fulfill these objectives. To attain the aforementioned objectives, a feasible structure has been built up to direct banks’ liquidity management in accordance with the attached guidelines, global standards and greatest practices. IIUC Studies Vol.15(0) December 2018: 59-71

scholarly journals Improving the Methodology of Liquidity of Commercial Banks in the Digital Economy

2021 ◽  
Vol 04 (05) ◽  
Author(s):  
Boburjon Bakhriddinovich Izbosarov ◽  
Keyword(s):  
Comparative Analysis ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Digital Economy ◽  
Liquidity Management ◽  
Approaches To Studying ◽  
Theoretical Approaches

This article discusses theoretical approaches to studying the nature of commercial bank liquidity. The article also discusses the essence of the Bank’s economic content, liquidity and solvency. A comparative analysis of the liquidity management methods of a commercial bank is analyzed.

scholarly journals Commercial Banks as a Key Element in Regulating Cash Flows in the Business Environment

2019 ◽  
Vol 8 (4) ◽  
pp. 4537-4543 ◽  
Keyword(s):  
Commercial Bank ◽  
Cash Flow ◽  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Cash Flows ◽  
Business Environment ◽  
Liquidity Management ◽  
Flow Regulator ◽  
Commercial Organization

One of the main tasks of the banking system since its inception is the regulation and redistribution of cash flows in the business environment. A key element of this system are commercial banks, which are the basis of the banking system.Being a commercial organization, the bank is primarily interested in maximizing profits, but at the same time, it is the process of maximizing profits that triggers the regulation and redistribution of cash flows in the business environment. The attraction and accumulation of liabilities, as well as the issuance of loans and credits, is carried out by commercial banks solely within the framework of the expediency of their activities, and this very activity helps to stimulate the redistribution of cash flows in the business environment.Traditionally, the bank’s liquidity indicators are associated with its financial stability, but this article will address the liquidity of a commercial bank in order to fulfill its functions as a cash flow regulator. Liquidity management methods are methods of influencing cash flows in a business environment; commercial bank liquidity management activities lead to changes in cash flows

EFFECT OF INTEREST RATES ON THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA

2017 ◽  
Vol 2 (1) ◽  
pp. 19
Author(s):  
Kihara Duke Wambari ◽  
Dr.Mirie Mwangi
Keyword(s):  
Financial Performance ◽  
Interest Rates ◽  
Commercial Bank ◽  
Research Design ◽  
Commercial Banks ◽  
Rate Ratio ◽  
Liquidity Management ◽  
Study Results ◽  
Lending Rate ◽  
Asset Quality

Purpose: The purpose of this study was to analyse effect of interest rates on the financial performance of commercial banks in Kenya.Methodology:The study adopted anexplanatory research design. This study adopted a census research design; of all the 43 commercial banks in Kenya.The  study also used   secondary data.Multiple linear regression model was  used to analyze the data using statistical package for the social sciences (SPSS) version 20.Results:The study established that lending rate ratio influence the financial performance of commercial banks in a positive way. Deposit interest ratio on the other hand negatively affects performance of commercial banks. Liquidity management and liquidity management influence performance positively and negatively respectively. The study concluded that there is a positive significant relationship between lending rate ratio and financial performance of commercial banks. The study also arrived at the conclusion that deposit interest ratio negatively affects bank performance. Moreover, the study concluded that liquidity management and asset quality affect performance positively and negatively respectively.Unique contribution to theory, practice and policy:Following study results, itwasrecommended that commercial banks in Kenya should keenly manage their lending interest rates given that lending interest ratio is directly related to performance. The study also recommends that commercial banks need to monitor the interest on deposits carefully. The deposit interest ratio is negatively affects performance. It represents the main expense by any commercial bank and therefore for a commercial bank to be profitable, they must maintain a reasonable spread. Commercial banks must strive to raise deposits at reasonable rates in order to on lend to the customers. Commercial banks that attract deposits cheaply are able to advance loans cheaply and therefore attract more borrowers.It is recommended that banks should embrace prudent credit risk management to maintain appropriate asset quality. Credit information sharing and cross referencing with credit bureaus will ensure high risk borrowers are closely monitored. Such measure will result in a reduction of nonperforming loans improve the asset quality

Analisis Kinerja Keuangan Bank Umum Syariah Melalui Pendekatan Islamicity Performance Index

2021 ◽  
Vol 7 (2) ◽  
Author(s):  
Safaah Restuning Hayati ◽  
Mutiah Hanifah Ramadhani
Keyword(s):  
Financial Performance ◽  
Commercial Bank ◽  
Performance Index ◽  
Commercial Banks ◽  
Secondary Data ◽  
Sampling Technique ◽  
Descriptive Research ◽  
Index Approach ◽  
Principles Of Justice ◽  
Quantitative Descriptive

This study aims to determine how the financial performance of Islamic commercial banks in Indonesia through the islamicity performance index approach for the period 2013-2017, by the principles of justice, halalness, and purification. This study using quantitative descriptive research. The number of banks sampled are five Islamic commercial banks in Indonesia that have been selected, through a purposive sampling technique first. These banks are BRI Syariah, BNI Syariah, Mandiri Syariah, BCA Syariah, and Victoria Syariah. The type of data used is secondary data taken from the financial statements of each islamic commercial bank that is sampled. Through the islamicity performance index approach, the results of this study indicate that the financial performance of islamic commercial bank is unsatisfactory, based on the average of the variables that have been processed in accordance with predicate valuation standards.

Non-banking financial intermediation and phenomena of shadow money in modern economy

2021 ◽  
Vol 27 (8) ◽  
pp. 1694-1709
Author(s):  
Vladimir K. BURLACHKOV
Keyword(s):  
Commercial Banks ◽  
Financial Intermediation ◽  
Banking System ◽  
Banking Regulation ◽  
Developed Countries ◽  
Bank Credit ◽  
Shadow Banking ◽  
Economic Agents ◽  
Shadow Banking System ◽  
Lending Activity

Subject. The article addresses the non-banking financial intermediation (shadow banking system) as it is successfully expanding nowadays both in developed countries and emerging economics. Objectives. The study aims at conducting a comprehensive analysis of the specifics of non-banking financial intermediation, revealing its impact on economic agents’ activities, causes and consequences, and elaborating the methodological framework for effectiveness of modern monetary policy. Methods. I employ methods of scientific abstraction, induction, deduction, synthesis, and comparative analysis. Results. In the modern national economy, along with the money, created by the central bank and commercial banks, there are highly liquid financial instruments called shadow money. The scope of its application is shadow banking (financial intermediation) outside the banking system. The use of shadow money is caused by high demand for credit resources. Conclusions. The high activity of shadow banking and increased turnover of shadow money resulted from a transfer to Basel standards of banking regulation in the 1990s, which affected the lending activity of commercial banks. Under these conditions, the demand for loans provided by non-bank credit and financial institutions increased. The market of non-bank credit products was formed. However, the process of lending in the shadow banking is associated with high risks and non-stability of shadow money, widely used in this sphere.

Determinants of commercial bank loan and advance disbursement: the case of private Ethiopian commercial banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tekeste Birhanu ◽  
Sewunet Bosho Deressa ◽  
Hossein Azadi ◽  
Ants-Hannes Viira ◽  
Steven Van Passel ◽  
...  
Keyword(s):  
Credit Risk ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Inflation Rate ◽  
Bank Loans ◽  
Bank Loan ◽  
Portfolio Investment ◽  
Negative Effects ◽  
Content Type ◽  
Lending Rate

PurposeThis paper aimed to investigate the determinants of loans and advances from commercial banks in the case of Ethiopian private commercial banks.Design/methodology/approachThe study randomly selected seven commercial banks to represent the population stratified on their asset, deposit and paid-up capital amounts. The study utilized an unbalanced panel data model as each bank started operation at a different period of time and considered the period 1995–2016 for secondary details.FindingsThe findings showed that the deposit size, credit risk, portfolio investment, average lending rate, real gross domestic product (GDP) and inflation rate had significant and optimistic effects on the lending and advancement of private commercial banks. On the contrary, liquidity ratio had significant and negative effects on private commercial bank loans and advances. Finally, the study forwarded a feasible recommendation for concerned organs to focus on deposit size, credit risk, portfolio investment, average lending rate, real GDP, inflation rate and liquidity ratio. The results of this study will help banking industry policymakers and planners understand how to minimize inflation and unemployment by improving development and sustainable economic growth.Originality/valueThe findings of this study can also affect the general attitudes of a society by increasing knowledge and improve the quality of life for the general public.

Determinants of liquidity in Malaysian SMEs: a quantile regression approach

2018 ◽  
Vol 67 (9) ◽  
pp. 1566-1584 ◽  
Author(s):  
Shaista Wasiuzzaman
Keyword(s):  
Regression Analysis ◽  
Quantile Regression ◽  
Emerging Market ◽  
Developed Countries ◽  
Data Availability ◽  
Firm Level ◽  
Liquidity Management ◽  
Ols Regression ◽  
Content Type ◽  
Quantile Regression Analysis

PurposeThe management of liquidity has always been seen as a critical but often ignored issue in finance. Despite the abundance of studies on liquidity management, these studies mainly focus on developed countries and on large firms. Liquidity is critical for the small firm but studies on liquidity management in small and medium enterprises (SMEs) are lacking. The purpose of this paper is to examine the firm-level determinants of liquidity of SMEs in Malaysia.Design/methodology/approachData are collected for a total of 986 small firms in Malaysia from 2011 to 2014, resulting in a total of 2,683 observations. Firm-specific variables and the effect of the economy are considered as the possible determinants of liquidity. Ordinary least squares (OLS) regression analysis with standard errors adjusted for firm-level clustering and quantile regression analysis are used for this purpose.FindingsAnalysis using OLS regression technique indicates that a firm’s profitability, its growth, asset tangibility, size, age and firm status are significant factors in influencing its liquidity decision. Leverage and economic condition are not found to have any significant influence on liquidity. However, quantile regression analysis provides a different picture especially for SMEs with liquidity at the quantile levels ofθ=0.10 and 0.90. Atθ=0.10, only profitability, tangibility and firm status are significant, while atθ=0.90, tangibility, size, firm status and, to some extent, age are significant in influencing liquidity levels.Originality/valueTo the author’s knowledge, this is the first study analyzing the liquidity decision of SMEs in an emerging market such as Malaysia. Most studies on liquidity management of SMEs are focused on developed countries due to data availability but these studies are also only a handful. Additionally, this study uses quantile regression analysis which highlights the need to analyze financial decisions at different levels rather than at the aggregate level as done in OLS regression analysis.

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