Abstract. Banks are the main part of financial sector in each economy and strength of banking system becomes vital for ensuring favourable economic stability and growth. Recent failure of two commercial banks in Lithuania showed that managers haven't evaluated liquidity risk or haven't dealt with it properly. The tasks of the paper are to investigate Lithuanian banks position towards liquidity risk, analyse what kind of management tools banks use for ensuring favourable position towards liquidity and to explore the liquidity influence to profitability in Lithuanian banking sector. The article examines liquidity and its management processes in Lithuanian banking sector. Description of liquidity importance is presented. Liquidity risk and its measurement as well as the ways of managing the above mentioned risk is analysed in the article. In order to analyse the relationship between liquidity risk and profitability of banks, analysis of scientific literature, research synthesis and generalizations have been made.
Abstract. Banks are the main part of financial sector in each economy and strength of banking system becomes vital for ensuring favourable economic stability and growth. Recent failure of two commercial banks in Lithuania showed that managers haven't evaluated liquidity risk or haven't dealt with it properly. The tasks of the paper are to investigate Lithuanian banks position towards liquidity risk, analyse what kind of management tools banks use for ensuring favourable position towards liquidity and to explore the liquidity influence to profitability in Lithuanian banking sector. The article examines liquidity and its management processes in Lithuanian banking sector. Description of liquidity importance is presented. Liquidity risk and its measurement as well as the ways of managing the above mentioned risk is analysed in the article. In order to analyse the relationship between liquidity risk and profitability of banks, analysis of scientific literature, research synthesis and generalizations have been made.
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