scholarly journals Liquidity risk regulation and its practical implications for banks: the introduction and effects of the Liquidity Coverage Ratio

2020 ◽  
Vol 94 (9/10) ◽  
pp. 367-378
Author(s):  
Alette Tammenga ◽  
Pieter Haarman
Keyword(s):  
Risk Management ◽  
Liquidity Risk ◽  
Bank Lending ◽  
Capital Regulation ◽  
Literature Study ◽  
Risk Regulation ◽  
Coverage Ratio ◽  
Definition Of ◽  
The Impact ◽  
Practical Implications

Following the financial crisis, quantitative liquidity risk regulation was introduced by means of the Liquidity Coverage Ratio (LCR). This literature study aims to investigate whether the introduction of the LCR leads to better liquidity risk management in banks. It elaborates on the drivers and definition of liquidity risk as well as the history, benefits and goals of this regulation. It also delves into the exact composition of the ratio and the assumptions used. The impact on bank lending as well as banks' business model and risk management is addressed, as well as the interaction with monetary policy operations and capital regulation. This paper then describes the operational differences that were observed after the implementation, and behavioral aspects. We also address the Net stable Funding Ratio (NSFR) and the discussion on interaction between the two indicators and possible redundancy. We have found that the introduction of the LCR leads to better management of liquidity risk for most financial institutions, but more harmonious implementation throughout the sector could reduce liquidity risk even further.

scholarly journals The teoretical aspects of Risk management and Crisis management

2009 ◽  
Vol 57 (6) ◽  
pp. 377-382
Author(s):  
Josef Zrůst
Keyword(s):  
Risk Management ◽  
Crisis Management ◽  
Business Environment ◽  
Negative Effects ◽  
Risk Regulation ◽  
Reciprocal Relations ◽  
Definition Of ◽  
Basic Features ◽  
The Impact ◽  
Subsequent Stabilization

This article defines the theoretical specification of risk management and crisis management. The main goal of this article is to define the basic features and understand the reciprocal relations between risk management and crisis management and their function in the business environment.Risk management is a process of risk regulation. It helps to protect an enterprise from the impact of existing and future risks. Part of this process is the decision process which derives from risk's analysis.Crisis management can be defined as a permanent process of monitoring single factors of efficiency with the goal to identifying and applying proactive steps leading to the prevention of crisis creation and its negative effects. Another definition evaluates crisis management as a process of crisis identification and the enterprise's subsequent stabilization.The specification of areciprocal relationship between risk management and crisis management arises from the definition of risk as a source of danger causing current or future crisis in the enterprise.

The impact of bank liquidity risk on risk-taking and bank lending: evidence from European bank

2021 ◽  
Vol 6 (2) ◽  
pp. 82-97
Author(s):  
Hongyan Liang ◽  
Zilong Liu
Keyword(s):  
Growth Rate ◽  
Risk Taking ◽  
Fixed Effects ◽  
Liquidity Risk ◽  
Bank Lending ◽  
Basel Iii ◽  
European Banks ◽  
Risk Taking Behavior ◽  
Loan Growth ◽  
The Impact

Objective – This paper uses a sample of annual observations of European banks to examine whether the liquidity risk affects a bank’s risk-taking behavior and its future loan growth. Methodology – A sample of European banks (27 member countries of the European Union plus U.K.) over the period of 2005 to 2019 are used in this study. Liquidity risk is measured by the ratio of liquid assets to total assets. Given the longitudinal nature of the data, the authors use panel regression with bank fixed effects to control for unobserved characteristics that might affect the dependent variable. Findings – The authors find that banks holding more liquid assets take less risk and show a higher subsequent loan growth rate. These results hold for both small and large banks. Novelty – To the authors’ best knowledge, this is one of the earliest studies to carefully examine the effects of liquidity risk on risk-taking behavior and loan growth rate for European banks. Our research suggests that the current Basel III requirement on liquidity ratio can decrease bank’s risking-taking behavior while not necessarily impact their future loan growth. Type of Paper: Empirical JEL Classification: G21, G01, G18. Keywords: Bank Liquidity Risk; Risk-taking Behavior; Loan Growth; Basel III

Dangerous liaisons?

2008 ◽  
Vol 29 (1/2) ◽  
pp. 116-124 ◽  
Author(s):  
John Rodwell ◽  
Linden Fairbairn
Keyword(s):  
Design Methodology ◽  
Service Delivery Model ◽  
University Libraries ◽  
Review Of The Literature ◽  
Content Type ◽  
Role Description ◽  
Definition Of ◽  
The Impact ◽  
Practical Implications

PurposeMany university libraries are adopting a faculty liaison librarian structure as an integral part of their organization and service delivery model. This paper aims to examine, in a pragmatic way, the variations in the definition of the role of the faculty liaison librarian, the expectations of those librarians, their library managers and their clients and the impact of environmental factors. The faculty liaison librarian role is not entirely new, evolving from the traditional subject librarian and university special/branch library role. However the emerging role is characterized by a more outward‐looking perspective and complexity, emphasizing stronger involvement and partnership with the faculty and direct engagement in the University's teaching and research programs.Design/methodology/approachFollowing a review of the literature and other sources on the rationale and role of library liaison, the current developments, drivers and expectations are discussed.FindingsThe study finds that dynamic external and internal environments of universities are driving the evolution of library liaison, so the role description is still fluid. However, the breadth and weight of expectations is now such that the effectiveness and sustainability of the role has to be addressed.Practical implicationsWhile a dynamic, broader and more intensive role for the faculty liaison librarian is emerging, more thinking is needed about the extent of that role and its sustainability. What, for example, are the priorities for the faculty liaison librarian? What traditional activities can, and may, have to be abandoned? These considerations are necessary not only to guide the librarians, but also to help define the attributes and skills required for the position and to determine the institutional support it requires.Originality/valueThis is a contemporary critique of the well‐established, but diverse library service – the faculty liaison librarian structure.

Liquidity risk management: conventional versus Islamic banking system in Egypt

2017 ◽  
Vol 8 (1) ◽  
pp. 100-128 ◽  
Author(s):  
Nevine Sobhy Abdel Megeid
Keyword(s):  
Risk Management ◽  
Banking System ◽  
Liquidity Risk ◽  
Policy Decision ◽  
Financial Statements ◽  
Decision Makers ◽  
Content Type ◽  
Bank Regulations ◽  
Conventional Banks ◽  
Practical Implications

Purpose This research aims to analyze and compare the effectiveness of liquidity risk management of Islamic and conventional banking in Egypt to ascertain which of the two banking systems are performing better. Design/methodology/approach A sample of six conventional banks (CBs) and two Islamic banks (IBs) in Egypt was selected. Using the liquidity ratios, the investigation involves analyzing the financial statements for the period of 2004-2011. The data were obtained from Bank scope database. Findings The research found that in Egypt, CBs perform better in terms of liquidity risk management than IBs. The liquidity risk management significant differences between IBs and CBs could be attributed more cash availability to CBs than to IBs, in addition, Egyptian Central Bank regulations on capital and liquidity requirements for IBs disconcert IBs’ performance. Practical implications This research facilitates the bankers, academician, scholars and bankers to have an alluded picture about Egyptian banking developments in liquidity risk management. The results can be used by bankers’ policy decision-makers to improve and enhance their consideration for liquidity risk management. Originality/value This research covers a period and a country that compares CBs’ and IBs’ liquidity risk management. Its value is attributed to the increasing differentiation between CBs and IBs.

scholarly journals The Impact of Liquidity Risk Management on the Financial Performance of Saudi Arabian Banks

2021 ◽  
Vol 11 (1) ◽  
pp. 67-75
Author(s):  
Ishaq Hacini ◽  
Abir Boulenfad ◽  
Khadra Dahou
Keyword(s):  
Risk Management ◽  
Financial Performance ◽  
Fixed Effects ◽  
Negative Impact ◽  
Control Variable ◽  
Liquidity Risk ◽  
Saudi Arabian ◽  
Return On Equity ◽  
Conventional Banks ◽  
The Impact

This paper aims to analyze the impact of liquidity risk management on the financial performance of selected conventional banks in Saudi Arabia for the period of 2002-2019. Liquidity risk is measured with the loan to deposit ratio (LTD) and cash to deposit ratio (CTD). Financial performance is measured by the Return on Equity (ROE). Equity to total asset ratio (ETA) is used as the control variable. The study uses the panel data method (Pool, Fixed-effects and Random-effects) for testing the study hypothesis. The results show that liquidity risk has a significant negative impact on the financial performance measured by Saudi Arabian banks.

scholarly journals Penerapan Manajemen Risiko pada Tingkat Efisiensi Keuangan di Bank DKI Jakarta

Owner ◽  
2021 ◽  
Vol 5 (2) ◽  
pp. 417-428
Author(s):  
Saridawati Saridawati ◽  
Murniyati Murniyati ◽  
Ratih Hastasari ◽  
Suharini Suharini
Keyword(s):  
Risk Management ◽  
Financial Services ◽  
Statistical Tests ◽  
Liquidity Risk ◽  
Operational Risk ◽  
Operating Income ◽  
Financing Risk ◽  
The Impact ◽  
Regional Development Banks ◽  
Positive Effect

Efficiency is one measure of bank performance. The efficiency of a bank is influenced by the way management manages risk. Financial services authority regulation number 18 /pojk.03/2016 issued by Bank Indonesia which requires every bank in Indonesia to form a risk management team. Risk management problems in the banking world are related to the losses they experience, and Regional Development Banks are expected to be able to detect maximum losses that may arise in the future. This team is obliged to control various aspects of risk management in each bank and observe the impact of risk management implementation. This study aims to determine the efficiency level of conventional banking at PT Bank Pembangunan Daerah Jawa Tengah and the effect of financing risk, operational risk and liquidity risk on the efficiency level. Efficiency is measured by the method of Operating Expenses from Operating Income. The data used as the object of this research is Bank DKI Jakarta for the 2015-2020 period. The level of influence of the variables X1, X2, X3 on Y on the determinant coefficient (R2) shows the Adjusted R Square number of 0.359 or 35.9% which means that the variation in efficiency level can be explained by financing risk, operational risk and liquidity risk, the remaining 64.1% can be explained from other variables outside, for previous related studies there is no similarity in the influence of independent (x) and dependent (Y) values, because of differences in values ??generated from SPSS processing data. Based on the results of statistical tests and discussion analysis, it is known that financing risk, operational risk, liquidity risk simultaneously have no effect on the level of efficiency and only financing risk has a significant positive effect on the level of efficiency at PT Bank DKI Jakarta.

scholarly journals An uncertain, erratic story: the pandemic in the UK

2020 ◽  
Vol 16 (4) ◽  
pp. 549-555
Author(s):  
Irvine Lapsley
Keyword(s):  
Health Care ◽  
Risk Management ◽  
Asset Management ◽  
Best Practice ◽  
Content Type ◽  
Individual Account ◽  
Reform Processes ◽  
The Uk ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to study the pandemic from the perspective of the UK health-care system and risk management. Design/methodology/approach This paper follows a storytelling perspective. The author reflects on his experiences through the lens of research on health care and risk management. Findings The impact of the pandemic has been so massive that it has challenged the capacity of the UKs National Health Service. The political influences at work have not always promoted best practice in risk management and indicate blame-avoidance strategies by politicians. Research limitations/implications A single country experience of COVID-19. Practical implications There are major issues of asset management, of delays in decision-making, of supply chain problems and the need to reform processes of handling of crisis management. Originality/value This is an individual account of experiences of the pandemic.

Risk management tools practiced in Islamic banks: evidence in MENA region

2014 ◽  
Vol 5 (1) ◽  
pp. 77-97 ◽  
Author(s):  
Rim Ben Selma Mokni ◽  
Abdelghani Echchabi ◽  
Dhekra Azouzi ◽  
Houssem Rachdi
Keyword(s):  
Risk Management ◽  
Design Methodology ◽  
Liquidity Risk ◽  
Public Disclosure ◽  
Islamic Banks ◽  
Mena Region ◽  
Management Tools ◽  
Content Type ◽  
Self Administered Questionnaire ◽  
Practical Implications

Purpose – The main purpose of this study is to investigate in detail the way each risk is being measured and managed by Islamic banks in the MENA region. Design/methodology/approach – This research attempts to examine the perceptions of Islamic bankers about the importance of transparency and public disclosure in the understanding of the bank's risk profile. It covers 23 Islamic banks located in the MENA region using self-administered questionnaire. Findings – The results show that there are differences in the level of risk perception across funding modes. Also Islamic banks use extensively the traditional tools in mitigating risk. Practical implications – The paper discusses and analyses the current practices employed in the risk management of Islamic banks. It identifies the tools and methods used in managing credit risk, market risk, liquidity risk and operational risk by Islamic banks. Originality/value – This study aims to extend the existing literature in two ways. First, this paper contributes to the dearth of studies on examination of tools practiced in the risk management by Islamic banks located in the MENA region. Next, this work integrates the methods used in the management of liquidity risk that have not been studied earlier.

scholarly journals Developing a Digital Entrepreneurial Mindset for Data-Driven, Cloud-Enabled, and Platform-Centric Business Activities: Practical Implications and the Impact on Society

2020 ◽  
pp. 3-21
Author(s):  
Mariusz Soltanifar ◽  
Edin Smailhodžić
Keyword(s):  
Business Models ◽  
Digital Technologies ◽  
Data Driven ◽  
The Internet ◽  
Success Stories ◽  
Challenges And Opportunities ◽  
Definition Of ◽  
The Impact ◽  
The Internet Of Things ◽  
Practical Implications

AbstractThe term ‘digital’ concerns not only technology but also people. This chapter emphasises the necessity of adopting a digital entrepreneurial mindset when operating in a digitised world. The chapter proposes a definition of a digital entrepreneurial mindset that is rooted in cognitive psychology, organisation theory and entrepreneurship literature. We also focus on the five trends that are shaping the digital future: mobile computing, cloud computing, social media, the Internet of Things and Big Data. The chapter discusses the challenges and opportunities that pervasive digitalisation offers for designing new digital business models and changing interactions with customers. Discussing the success stories of Domino’s Tesco and Tate Art Galleries helps to examine data-driven, cloud-enabled, platform-centric business activities, for which developing a digital entrepreneurial mindset is the first step towards success in the digital age. Collectively, the aforementioned cases suggest that businesses that rely on a digital entrepreneurial mindset enjoy better financial performance. Both managers and employees in these companies have shown the inclination and ability to discover, evaluate and exploit opportunities emerging from digital technologies. This chapter also provides a practical guide for entrepreneurs on the steps they can take to encourage a digital entrepreneurial mindset throughout their entire organisations. Finally, we elaborate on the practical implications of adopting a digital entrepreneurial mindset and its impact on society.

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