Management Strategies for Bank’s Liquidity Risk

Hlebik, Sviatlana; Ghillani, Lara

doi:10.5539/ijef.v9n6p98

Cited by 4 publications

(4 citation statements)

References 6 publications

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“…To reduce exposure to liquidity risk, regulators need to ensure that banks are able to meet funding requirements. In addition, banks need to be amenable to investing in high liquid assets, which are convertible to cash to meet anticipated funding needs (Hlebik & Ghillani, 2017). The finding that capitalization improves profitability shows that adequately capitalized banks will achieve better profitability than less capitalized banks.…”

Section: Discussionmentioning

confidence: 99%

Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses

Oredegbe¹

2020

IJEF

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This study investigates the Canadian banking industry profitability and seeks to determine if there is evidence of market power hypothesis (MPH) and/or efficiency structure hypothesis (ESH) in the industry. Using GMM and data from 2006 to 2018, it finds no support for the structure-conduct-performance (SCP) component of MPH. However, evidence of relative market power (RMP) in the industry reflects partial support for MPH, implying that banks that offer differentiated products are able to exercise market power, increase market share, and achieve better profitability. The lack of support for X-efficiency (ESX) and scale efficiency (ESS), which are components of ESH, indicates no support for the ESH. The finding that QLH holds in the industry suggests the level of competition is inadequate and that managers in the industry exhibit suboptimal behaviour. Therefore, increasing the level of competition in the industry will stimulate managerial effectiveness. Findings relating to the control variables show that spread impedes profitability, whereas capitalization and the joint influence of spread and liquidity risk have facilitating effects. Credit risk is immaterial to profitability however, the effect of economic growth can be positive. This study provides a better understanding of the industry, which is important to managers, regulators, and policy makers. The robustness checks affirm the consistency of the findings and policy implications.

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Section: Discussionmentioning

confidence: 99%

Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses

Oredegbe¹

2020

IJEF

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“…Liquidity risk management is highly important for firms since the consequences of liquidity insufficiency can be extremely felt on both scales from the firm to the full system. Therefore, firms are responsible for sound management of liquidity risk, which focuses on conserving enough level of liquidity, moreover being ready to face a range of pressure situations, probable losses, or weakness of funding sources (Sviatlana & Lara, 2017).…”

Section: Review Of Study Variablesmentioning

confidence: 99%

Influence of Financial Risk Management on the Financial Performance of Logistics Companies in the Coastal Region

OMEDO,

WANJALA, PhD

2023

strategicjournals.com

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This research established the influence of financial risk management strategies on the financial performance of logistics companies in the Coastal Region. The study adopted a cross-section research design. The researcher targeted 132 logistics companies in Kilifi and Mombasa Counties. The research used primary data where structured questionnaires was used to collect data for analysis. Finally, the researcher used SPSS version 26 for data analysis. It was determined that foreign exchange risk management strategy significantly affect financial performance of logistics companies (r=0.140; p=0.003). It was further determined that an improvement of foreign exchange risk management strategy would significantly contributes to the improvement of financial performance of the organization (β=0.127; t=2.037; p=0.044). On the second objective, it was determined that liquidity risk management strategy positively and significantly affect financial performance of logistics companies (r=0.128; p=0.008). It was shown that liquidity risk management strategy improvement significantly contributes to the improvement of financial performance (β=0.218; t=2.741; p=0.007). It was determined that market risk management strategy significantly and positively affects performance of the organization (r=0.112; p=0.007). It was further determined that market risk management strategy improvement would significantly contributes to the improvement of organizational performance (β=0.173; t=3.045; p=0.003). On the fourth objective, the study established that credit risk management strategy significantly and positively affects the financial performance of logistics organisations (r=0.201; p=0.004). It was also determined that credit risk management strategy improvement would lead to a significant improvement of financial performance (β=0.173; t=3.045; p=0.003). The study concluded that financial risk management strategies (foreign exchange risk management strategies, liquidity risk management strategies, market risk management strategies and credit risk management strategy) significantly affects financial performance of logistics companies. The study recommends that; foreign exchange risk management should always be taken in to account to improve the firms return on assets and hence the financial performance of the logistic firms. Policy makers should also undertake to understand risks affecting the foreign exchange markets in order to maximize returns.

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“…Likidite riskinin sonuçları bankalar ve tüm finansal sistem tarafından hissedilebildiğinden, likidite riski yönetimi sadece bankalar için değil tüm finansal sistem sistemi için büyük önem taşımaktadır. Bu nedenle bankaların, uygun bir likidite seviyesini sürdürmenin yanı sıra baskı, potansiyel kayıp veya zayıf sermaye durumlarına hazırlıklı olmaya odaklanan likidite riskini yönetme sorumluluğu vardır (Sviatlana ve Lara, 2017;Berrani ve Hacini, 2021). Doğru ve verimli varlık (likidite) yönetimi, herhangi bir kuruluşun sorunsuz çalışması ve finansal performansı iyileştirmesi için şarttır.…”

Section: öZunclassified

“…Since the consequences of lack of liquidity can be felt by individual banks and the entire financial system, liquidity risk management is of great importance not only for banks but also for the entire system. Therefore, banks are responsible for the management of liquidity risk, which focuses on maintaining an adequate level of liquidity, being prepared to face various pressures, possible losses or weakness of funding sources (Sviatlana and Lara, 2017;Berrani and Hacini, 2021). Correct and effective management of liquidity is critical to the successful operation of any organization and improves financial performance.…”

Section: Introductionmentioning

confidence: 99%

The Relationship of Liquidity Risk and Financial Performance: A Comparative Analysis for Private and Foreign Capital Banks

ALEV

2023

Adıyaman Üniversitesi Sosyal Bilimler Enstitüsü Dergisi

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Yetersiz likidite, banka başarısızlığının ana nedenlerinden biri olmakla birlikte, likit varlıkların sahip olduğu düşük likidite primi, yani likit olmayan varlıklara göre getirisinin daha düşük olması da banka başarısızlıklarına yol açabilmektedir. Bu nedenle likidite riski ve likidite riski yönetimi bankaların önem vermesi gereken konulardandır. Bu bağlamda bu çalışmada, Türkiye'deki 8 özel ticari banka ve 11 yabancı sermayeli ticari bankanın performansı ile likidite riski ve likidite riski yönetimi arasındaki ilişkinin 2010 yılının ilk çeyreğinden 2022 yılının dördüncü çeyreğine kadar incelenmesi amaçlanmıştır. Bu amaçla ortalama aktif getirisi ve ortalama özsermaye getirisi oranının bağımlı değişken olduğu iki farklı model kurulmuştur. Finansman açığının toplam varlıklara oranı, toplam kredinin toplam varlıklara oranı, likit varlıkların toplam varlıklara oranı, toplam öz sermayenin toplam varlıklara oranı, toplam varlıkların doğal logaritması, toplam kredilerin toplam mevduatlara oranı ve likit aktiflerin kısa vadeli yükümlülüklere oranı modellerde yer alan bağımsız değişkenlerdir. Bankalara ait veriler Türkiye Bankalar Birliğinin veri tabanından elde edilmiştir. Oluşturulan modeller Esnek Genelleştirilmiş En Küçük Kareler yöntemi ile tahmin edilmiştir. Regresyon analizlerinden elde edilen bulgular yabancı sermayeli bankaların likidite riski yönetiminde daha başarılı olduğunu ortaya koymuştur. Bu sonuca paralel olarak bulgular, likidite riskinin yabancı sermayeli bankaların performansını arttırdığı özel sermayeli bankaların performansını düşürdüğünü göstermiştir.

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Management Strategies for Bank’s Liquidity Risk

Cited by 4 publications

References 6 publications

Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses

Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses

Influence of Financial Risk Management on the Financial Performance of Logistics Companies in the Coastal Region

The Relationship of Liquidity Risk and Financial Performance: A Comparative Analysis for Private and Foreign Capital Banks

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