Bank Liquidity and the New Doctrine of Anticipated Income

Prochnow, Herbert Victor

doi:10.2307/2975424

Cited by 3 publications

(1 citation statement)

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“…Thirdly, the income anticipation theory developed by Ref. [ 39 ] suggests that banks could reduce the risk associated with long-term loans by making monthly principal and interest payments. If the borrower's expected income is to repay these loans in periodic and regular premiums, the bank's managers could plan its liquidity based on the predicted earnings of the borrowers, enabling the bank to grant medium- and long-term loans in addition to short-term loans.…”

Section: Literature Reviewmentioning

confidence: 99%

Liquidity creation and bank risk-taking: Evidence from a transition market

Vuong,

Phan,

Nguyen

et al. 2023

Heliyon

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Section: Literature Reviewmentioning

confidence: 99%

Liquidity creation and bank risk-taking: Evidence from a transition market

Vuong,

Phan,

Nguyen

et al. 2023

Heliyon

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Segmented dynamic optimization model for asset-liability management of commercial banks and its applications

Wen-ze

Cai

2012

J. Shanghai Jiaotong Univ. (Sci.)

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Asset-liability management is the core business of commercial banks. Effective method of asset-liability management is a continuously exploring topic in the academic and practical fields. According to the operational characteristics of commercial banks, this paper addresses a segmented dynamic optimization model under the perspective of the regulatory environment for China commercial banks. The model can perform segmented sliding optimization and correct control variables to make optimal decision with the changes in situations for a certain future time.The theories on the operation and management of commercial banks have evolved for several decades, from the real-bills doctrine [1] to the asset shiftability theory [2] , the anticipated income theory [3] , the liability management theory [4] , and then to the assetliability management theory [4] . China and international scholars have come up with a lot of asset-liability management models, e.g., the asset allocation decisionmaking model [5][6] , the asset-liability portfolio rationing model [7][8] , the non-liquidity dynamic portfolio selection model [9] , and the two-stage optimization model [10] . These models provided useful guidance for improving the asset-liability management of commercial banks. In practice, commercial banks also have conducted extensive studies [11] . They may minimize risks and increase income by using approaches, such as the interest rate sensitivity gap, the duration gap and the target ratio and linear planning, to match the level of assets and liabilities. In recent years, China commercial banks attached more and more importance to the asset-liability management. However, due to the objective environment of the market and the management techniques and business concepts of commercial banks, currently

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What Can We Learn from the Real Bills Doctrine?

Tarkka¹

2019

CCM

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The historical development of bank liquidity doctrines is surveyed from the real bills doctrine and its antecedents to the present day. The underlying ideas of the succession of several dominant liquidity doctrines are analysed and compared, with attention to their historical contexts and respective weaknesses as exposed by experience. While the real bills doctrine is obsolete as such, its central idea that the liquidity of banks requires their credit to be linked to real income generation in the economy is unique among the different liquidity doctrines and can be useful as the liquidity regulation of banks is now subject to renewed interest. Zusammenfassung Der Artikel bietet einen Überblick über die historische Entwicklung von Theorien der Bankenliquidität seit der Real Bills Doktrin. Die den unterschiedlichen Liquiditätstheorien zugrundeliegenden Ideen werden analysiert und verglichen, mit besonderem Augenmerk auf ihren historischen Kontext und ihre jeweiligen Schwächen. Auch wenn die Real Bills Doktrin weitgehend überholt ist, so bleibt trotzdem ihre Kernidee, dass die Liquidität der Banken eine Koppelung der Bankkredite an die Schaffung realen Einkommens erfordert, einzigartig unter den verschiedenen Liquiditätsdoktrinen. In Zeiten eines erneuten Interesses an der Liquiditätsregulierung von Banken kann sich diese Idee als nützlich erweisen. JEL Classification: B12; B26; G21

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Bank Liquidity and the New Doctrine of Anticipated Income

Cited by 3 publications

References 0 publications

Liquidity creation and bank risk-taking: Evidence from a transition market

Liquidity creation and bank risk-taking: Evidence from a transition market

Segmented dynamic optimization model for asset-liability management of commercial banks and its applications

What Can We Learn from the Real Bills Doctrine?

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