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The Basic Concepts and Feature of Bank Liquidity and Its Risk

Author

Listed:
  • Sekoni, Abiola
Abstract
Liquidity is fundamental to the well-being of financial institutions particularly banking. It determines the growth and development of banks as it ensures proper functioning of financial markets. Inadequacy of liquidity causes adverse effect on the market values of asset.. Therefore studying and understanding liquidity has very important practical implications. However, understanding the term liquidity is an arduous task due the diversity in its meanings and connotations. This paper attempts to examine different liquidity definitions and the concepts as well as discusses sources of liquidity and its risk.

Suggested Citation

  • Sekoni, Abiola, 2015. "The Basic Concepts and Feature of Bank Liquidity and Its Risk," MPRA Paper 67389, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:67389
    as

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    File URL: https://mpra.ub.uni-muenchen.de/67389/1/MPRA_paper_67389.pdf
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    References listed on IDEAS

    as
    1. Goodhart, C., 2008. "Liquidity risk management," Financial Stability Review, Banque de France, issue 11, pages 39-44, February.
    2. Hennie Van Greuning & Sonja Brajovic Bratanovic, 2003. "Analyzing and Managing Banking Risk : A Framework for Assessing Corporate Governance and Financial Risk Management, Second Edition," World Bank Publications - Books, The World Bank Group, number 14949.
    3. Crockett, A., 2008. "Market liquidity and financial stability," Financial Stability Review, Banque de France, issue 11, pages 13-17, February.
    4. Nikolaou, Kleopatra & Drehmann, Mathias, 2009. "Funding liquidity risk: definition and measurement," Working Paper Series 1024, European Central Bank.
    5. Viral V. Acharya & Hyun Song Shin & Tanju Yorulmazer, 2011. "Crisis Resolution and Bank Liquidity," The Review of Financial Studies, Society for Financial Studies, vol. 24(6), pages 2166-2205.
    6. Nikolaou, Kleopatra, 2009. "Liquidity (risk) concepts: definitions and interactions," Working Paper Series 1008, European Central Bank.
    7. Bervas, A., 2006. "Market liquidity and its incorporation into risk management," Financial Stability Review, Banque de France, issue 8, pages 63-79, May.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Subrata Deb Nath & Munna Rani Biswas & Md. Abdul Maleque M.M Mohitur Islam, 2024. "Effect of Basel III Liquidity Ratio LCR and NSFR on the Profitability of Commercial Banks in Bangladesh," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 12-28.

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    More about this item

    Keywords

    Liquidity; Financial institution; Financial Markets; risk;
    All these keywords.

    JEL classification:

    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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