Kunpeng Project
Liquidity Risk Management Skills for Commercial Banks**.
Under the current economic situation in China, there are serious liquidity problems in China's financial market, the most important of which is liquidity risk. In order to effectively control liquidity risk, the following aspects should be started:
1.Set the upper limit of liquidity risk: determine the appropriate amount of liquidity risk according to its own scale, business scope and risk tolerance, and disclose the relevant information through the management department.
2.Financial planning and management: Through the analysis of customer business and the establishment of financial model, a set of effective liquidity risk management plans are proposed for the cash flow problems that may occur in the bank.
3.Diversification: By diversifying, the impact on the liquidity of assets can be reduced. If a bank invests entirely in the same type or similar enterprises, it exposes its assets to the same risk as its liabilities, resulting in a shortage or misuse of the bank's capital.
4.Increase the proportion of high-quality assets: The greater the proportion of high-quality assets, the smaller the liquidity risk. Therefore, it is necessary to increase investment in high-quality assets as much as possible and reduce investment in high-risk assets.
5.Establish a liquidity reserve: In the event of a capital shortage, a liquidity buffer can be established to effectively serve as a buffer, thereby improving its control of liquidity risk.
In general, corporate banks have conducted scientific research on liquidity risks, determined the upper limit, carried out robust expectations and plans, diversified risk investment, increased the proportion of high-quality assets, and built a liquidity reserve to achieve effective risk management and control, so as to ensure the safety of business operations.