In today’s banking business, liquidity risk and its management are some of the most critical elements that underlie the stability and security of the bank’s operations, profit-making and clients confidence as well as many of the decisions that the bank makes. Managing liquidity risk in a commercial bank is not something new, yet scientific literature has not focused enough on different approaches to liquidity risk management and assessment. Furthermore, models, methodologies or policies of managing liquidity risk in a commercial bank have never been examined in detail either. The goal of this article is to analyse the liquidity risk of commercial banks as well as the possibilities of managing it and to build a liquidity risk management model for a commercial bank. The development, assessment and application of the commercial bank liquidity risk management was based on an analysis of scientific resources, a comparative analysis and mathematical calculations.
With the banking business developing, the system of bank values is becoming increasingly relevant. Adherence to the norms of the bank’s ethics helps developing and improving ties among the bank’s employees as well as relations with the clients. Appropriate behaviour and social culture on the part of the staff shape the image of the bank and stimulate loyalty in the clients. The sophisticated and reliable operation of banks can be judged both in terms of its legal and economic aspects, and ethics. The article addresses the ethics requirements for banks’ staff, deals with the analysis and assessment of the application of ethical norms in the process of rendering financial services, and reveals the principal provisions laid down in banks’ codes of ethics and estimations.
In the recent years, the role of credit unions in the financial sector of Lithuania has gradually become more significant. The number of credit unions grew together with their assets, number of members, and depo sits. The beginning of a rapid process of credit unions' establishment and development caused unmeasured risks which led to a suspended activity of several credit unions in 2013. This caused an insignificant migration of credit unions' shareholders (members) from one union to another, retirements, etc. Although residents haven't lost the confidence, this fact demands to investigate and analyse the factors determining the choice of a credit union. After a survey of credit union members in Lithuania, the factors most significant for shareholders were determined. Also, the factors least significant for the choice of a credit union were determined, and conclusions and recommendations for managers of credit unions were given. Conclusions and recommendations can help the management to choose the strategy which would result in a higher level of new members' involvement in the union.
There are a number of different financial market institutions such as banks, credit unions, leasing and insurance companies, as well as capital market players in Lithuania. The bank sector makes the largest part of the financial market (more than 80%). Thus, the bank sector has a considerable influence on the country's economy. Banks are not specialized in Lithuania, i.e. they are universal banks which seek to provide quite a wide range of financial services. The successful performance of a bank mostly depends on how it succeeds to manage the risks. The problems of risk management are becoming an object of exceptional attention while enhancing the variety of analysed risks as well as developing the investigation instruments both in the whole world and in Lithuania. Loans make the largest part of bank assets. So, the loan risk management is one of the most important guarantees of safe banking. To manage effectively the bank credit risk, it should be adequately evaluated.
A country’s image, economic development process and GDP growth is significantly influenced by its banking sector performance. Banking’s success largely depends on public confidence. Only a small part of the banking services customers understand the indicators and ratios which are used to assess bank’s activities. Therefore, there is a need to analyze banks performance results in Lithuania. The paper presents a principal component analysis model applied on banks performance ratios in Lithuania. The main purpose of this article is to analyze basic indicators used in banks performance evaluation by principal component method. The obtained results represent the main components with the highest influence on Lithuanian commercial banks performance results in 2008–2012 year period. The main findings of the study indicate that commercial banks in Lithuania have been affected by different factors during 2008–2012 periods. It has been noted that Scandinavian capital commercial banks‘ performance results have been influenced by similar factors, have had similar structure of the factors, which has been more stable in comparison with small and/or Lithuanian capital banks. Conclusions and recommendations help banks’ board to improve their competitiveness and financial results, thus it also helps them to make appropriate decisions. It is also useful for an academic community to understand the structure of main components in banking sector.
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