Commercial bank liquidity management as a component of its financial stability

2015 ◽  
Vol 3 (3) ◽  
pp. 261-269
Author(s):  
Наталья Шира ◽  
Natalya Shira
Keyword(s):  
Commercial Bank ◽  
Financial Stability ◽  
Insurance Companies ◽  
Liquidity Management ◽  
Banking Institution ◽  
Competitive Products

The article describes the concept of commercial bank liquidity management. The algorithm for commercial bank liquidity management, with the help of which the bank has the ability to identify liquidity reduction objects, identify threats that have impact on banking institution liquidity,is offered. The ways of maintaining the bank liquidity, which include the introduction of new competitive products, improving credit and deposit policy, cooperation with insurance companies and the like, are determined.

scholarly journals Identification of Qualifying Factors of Influence in the Context of Financial Stability Management of a Commercial Bank

2021 ◽  
Vol 7 (522) ◽  
pp. 212-221
Author(s):  
O. M. Kovalova ◽  
Keyword(s):  
Commercial Bank ◽  
Financial Stability ◽  
Banking System ◽  
Information Provision ◽  
Resource Base ◽  
Credit Risks ◽  
Systematic Risks ◽  
Characteristic Features ◽  
Banking Institution ◽  
The Impact

The article is aimed at closer defining the theoretical provisions for improving the management of financial stability of a commercial bank and assessing its current state in the context of the impact of destabilizing factors. Scientific approaches to the definition of the category of «financial stability of a commercial bank» are considered, which allows to detail its characteristic features and form a comprehensive idea of the financial stability of a commercial bank as a system category, the timely estimation of benchmarks of which allows minimizing the impact of specific and systematic risks to the economic environment in conditions of high uncertainty. The article systematizes the normative legal acts regulating all potential aspects of the commercial bank's financial stability shift due to changes in the structure of capital, liquidity, solvency, credit risks and being part of the information provision for the analysis of financial stability of a commercial bank. The classification of factors influencing the financial stability of a commercial bank is generalized. The influence of the epidemiological crisis associated with the spread of COVID-19 on key benchmarks of the banking system in terms of assessing the financial stability of the banking institution is examined. The dynamics of changing the proportion of non-performing loans of commercial banks of Ukraine is analyzed, as lending creates the basis for ensuring a balance between temporarily free funds and the amount of resources required at the microlevel of the financial system for sustainable development. Particular attention is paid to the aspects of balance and sustainability of the resource base of the commercial bank, which led to a thorough analysis of the liabilities of the banking system from the position of influencing the financial stability of a commercial bank.

scholarly journals ВПЛИВ ІНОЗЕМНОГО КАПІТАЛУ НА БАНКІВСЬКУ СИСТЕМУ УКРАЇНИ В УМОВАХ ГЛОБАЛІЗАЦІЇ

2020 ◽  
pp. 76-85
Author(s):  
Марина Сергіївна Татар ◽  
Анастасія Олександрівна Рикова
Keyword(s):  
Commercial Bank ◽  
Financial Stability ◽  
Banking Sector ◽  
Synthesis Method ◽  
Legal Regulation ◽  
Practical Implementation ◽  
Security Level ◽  
Financial Security ◽  
Express Analysis ◽  
Banking Institution

Modern globalization and integration processes, introduction of the latest information technologies, competition in the banking sector, increasing of foreign banking capital share, lack of comprehensive legal regulation of banking activities, lack of development of Ukrainian financial markets, tense criminal challenges lead to new threats to financial security of the banking sector in general and of individual banks in particular. In turn, the efficient functioning of the banking system is impossible without maintaining high level of financial security of each commercial bank. The aim of the research is deepening the theoretical and methodological foundations of commercial bank financial security assessing and to development practical recommendations for improving its level. The subject of the research is theoretical and methodological principles and practical aspects of analysis and assessment of bank financial security level . The methods of the research: logical and meaningful method, method of comparison, method of analysis and synthesis, method of expert estimation, method of coefficients, integral method, etc. The hypothesis of the research. The investigation of the current state of a bank's financial security should be conducted in several stages: questioning of typical (external and internal) threats to the bank's financial security; express analysis of commercial bank financial security level; calculation of the integral index of bank financial security level. The statement of basic materials. The survey conducted typical external and internal threats to bank financial security, the results of which showed that the investigated bank is protected from external threats to financial security by 60% (9 points out of 15 possible) and from internal threats by 100% (15 points out of 15 possible). In the second stage of the process of financial security research, express analysis of financial security was carried out on the bases of the coefficients method, which includes four groups of basic banking indicators: bank financial stability indicators, bank business activity indicators, bank liquidity indicators, efficiency of bank activity indicators. The results of the rapid financial security diagnostics showed that in 2014-2015 the bank had low level of financial security, and in 2016-2018 it was sufficient. In addition, the integral financial security index of the bank is calculated, including the following indicators: financial and economic standards, credit and deposit dollarization, banking performance (ROA, ROE), profitability indicators and others. Integrated financial security indicators show that the highest level of financial security was in 2016, and in 2018 it was sufficient. It also proposes measures to enhance various components of the bank's financial security, the practical implementation of which will improve the efficiency of managing of banking institution financial security. The originality and practical significance of the research is development an approach to assessing commercial bank financial security and implementation it on the example of Raiffeisen Bank Aval. Conclusions and perspectives of further research. The approach to the assessment of the financial security level is proposed, which involves carrying out the evaluation in several stages, namely, the questioning of external and internal threats to bank financial security, express analysis of the financial security level of a commercial bank and calculation of an integral indicator of bank financial security level, which makes possible to assess the bank financial security level. It also proposes measures to enhance various components of the bank's financial security, the practical implementation of which will improve the efficiency of managing of banking institution financial security. As part of the further study it is planned to evaluate the effectiveness of the proposed measures of bank financial security level increasing.

scholarly journals Commercial Banks as a Key Element in Regulating Cash Flows in the Business Environment

2019 ◽  
Vol 8 (4) ◽  
pp. 4537-4543 ◽  
Keyword(s):  
Commercial Bank ◽  
Cash Flow ◽  
Commercial Banks ◽  
Financial Stability ◽  
Banking System ◽  
Cash Flows ◽  
Business Environment ◽  
Liquidity Management ◽  
Flow Regulator ◽  
Commercial Organization

One of the main tasks of the banking system since its inception is the regulation and redistribution of cash flows in the business environment. A key element of this system are commercial banks, which are the basis of the banking system.Being a commercial organization, the bank is primarily interested in maximizing profits, but at the same time, it is the process of maximizing profits that triggers the regulation and redistribution of cash flows in the business environment. The attraction and accumulation of liabilities, as well as the issuance of loans and credits, is carried out by commercial banks solely within the framework of the expediency of their activities, and this very activity helps to stimulate the redistribution of cash flows in the business environment.Traditionally, the bank’s liquidity indicators are associated with its financial stability, but this article will address the liquidity of a commercial bank in order to fulfill its functions as a cash flow regulator. Liquidity management methods are methods of influencing cash flows in a business environment; commercial bank liquidity management activities lead to changes in cash flows

scholarly journals INTEGRATED APPROACH TO ASSESSMENT OF THE LEVEL OF FINANCIAL STABILITY OF BANKS IN THE SYSTEM OF THEIR FINANCIAL RECOVERY

2021 ◽  
Vol 2 (37) ◽  
pp. 14-23
Author(s):  
O. Vovchak ◽  
R. Stadniychuk
Keyword(s):  
Financial Stability ◽  
Banking System ◽  
Integrated Approach ◽  
Jel Classification ◽  
Liquidity Management ◽  
Management Efficiency ◽  
Recovery System ◽  
Methodological Approaches ◽  
Banking Institution ◽  
Financial Recovery

Abstract. The article is devoted to the development of methodological approaches to assessing the level of financial stability of banks in the system of their financial recovery based on the use of an integrated approach. The paper substantiates the principles of evaluating the effectiveness of the financial recovery system, and proves that it should be based on indicators of financial stability, business activity, liquidity, management efficiency, as well as indicators, the negative value of which can lead to insolvency of a banking institution. The complexity of the internal structure of the proposed integrated indicator of the level of financial stability of the banking system allows to identify weak areas in its functioning and vector to direct the actions of the regulator for timely reorganization or effective management in the financial recovery of banks. Keywords: banking system, financial recovery, financial stability, integrated indicator, financial stability indicators. JEL Classification G21, G24, G31, G33 Formulas: 8; fig.: 3; tabl.: 6; bibl.: 9.

SIMULATION OF THE PROCESS OF FINANCIAL STABILITY MANAGEMENT OF A COMMERCIAL BANK

2017 ◽  
Author(s):  
Mariia Bondarchuk ◽  
◽  
Stepan Paranchuk ◽  
Oleksandra Vivchar ◽  
Kateryna Motorya ◽  
...  
Keyword(s):  
Commercial Bank ◽  
Financial Stability ◽  
Financial Institution ◽  
Main Element ◽  
Mathematical Methods ◽  
Resource Base ◽  
Main Indicator ◽  
Reliability Indicator ◽  
Banking Institution ◽  
Internal And External Factors

In the article to ensure a constant level of stable activity of a commercial bank, economic and mathematical methods for managing its financial stability are proposed for use. To achieve financial and social effect, the banking institution must analyze its current state and targets, identify problems in the bank's activities and prospects for its development, taking into account internal and external factors. In this context, a mechanism for managing the financial stability of the bank is proposed. Correlation-regression analysis of the reliability indicator for UKRSIBBANK BNP Paribas Group was performed. It was established that the years 2015-2016 were problematic for the bank due to economic instability in Ukraine. Another inevitable factor that affected the functioning of the bank was the height of the Covid-19 epidemic, which significantly shook the level of its financial stability. The forecast reliability indicator of UKRSIBBANK BNP Paribas Group in the third quarter of 2020 decreased by another 12.12% compared to the fourth quarter of 2019. Therefore, in order to stimulate further development and increase the bank's profitability, it is necessary to adopt a number of recommendation requirements for ensuring and managing the financial stability of UKRSIBBANK BNP Paribas Group. Therefore, it is established that the main element of strategic planning of the financial institution is to assess the actual adequacy of the resource base of the bank in comparison with the planned. According to the results of the study on modeling the process of managing the financial stability of the bank, it is determined that the main indicator of the effective operation of a banking institution is the quality of its capital and resources. In fact, their optimal ratio in terms of liquidity, financial stability, solvency and profitability contributes to the growth of customers and, consequently, the amount of income of the bank.

Financial Risks of the Bank: Assessment and Mechanism of Neutralization

2020 ◽  
Vol 22 (1) ◽  
pp. 6-12
Author(s):  
Nelia Volkova ◽  
◽  
Alina Mukhina ◽  
Keyword(s):  
Risk Assessment ◽  
Financial Stability ◽  
Financial Risk ◽  
Stable Operation ◽  
Financial Risks ◽  
Negative Consequences ◽  
Conceptual Approach ◽  
Relevant Today ◽  
Banking Institution ◽  
The Impact

Abstract. Introduction. The issue of financial risk management of commercial banks is quite relevant today, because the activity of banks is the most risky of all. The presence of risks in banking can lead to unexpected losses, namely the loss of own resources. That’s why for the stable operation of the bank without loss the priority is to assess the financial risks, which is the basis for their further neutralization. Purpose. The purpose of the article is to develop conceptual provisions for assessment financial risks and justifying the need to neutralize them. Results. The article analyzes the impact of risks on the financial stability of a banking institution. The main methods of bank risk assessment are considered. All these include the statistical method, the analytical method, the expert method, the analogue method and the combined method. The necessity of neutralization of financial risks in order to avoid negative consequences is substantiated. Also the methods of bank risks neutralization are considered. It should be noted that these methods of neutralization can not only be used, but also supplement the list with new methods must be done, which in the future will protect the bank from the influence of undesirable factors. A conceptual approach to the assessment and neutralization of financial risks is proposed. This conceptual approach aims to ensure effective assessment of the level of risk with their subsequent neutralization Conclusions. Use of a conceptual approach will allow an effective risk assessment and decision-making to avoid or accept risk. Thanks to using this approach, the banking institution will be able to react swiftly to the presence of financial risks and to prevent the occurrence of negative consequences, which may lead to a violation of the financial stability of the bank.

DEA Window Analysis of Insurance Sector Efficiency in the Republic of Serbia

2020 ◽  
Vol 58 (3) ◽  
pp. 291-310
Author(s):  
Zlata Đurić ◽  
Milena Jakšić ◽  
Ana Krstić
Keyword(s):  
Financial Stability ◽  
Theoretical Research ◽  
Insurance Companies ◽  
Scale Efficiency ◽  
Financial Investment ◽  
Main Research ◽  
Insurance Sector ◽  
Window Analysis ◽  
The Republic ◽  
Dea Window Analysis

Abstract Insurance market is characterized by growing competition. This has imposed needs relating to the continuous capacity building of insurance companies, the continuous improvement of operating results and the assessment of the effects of insurers’ financial investment. The ultimate goal of these activities is to implement the planned goals and achieve positive business results. It is evident that the financial stability and efficiency of the insurance sector strengthens the confidence of citizens in this type of financial intermediaries. Bearing in mind the importance of the insurance sector for the financial system and economic system growth and development, the research subject is the analysis of the insurance sector efficiency in the Republic of Serbia. The main research objective is to look at the insurance sector efficiency through the performance analysis of nine selected insurance companies in the period 2007-2018, using DEA window analysis. The analysis and systematization of theoretical research findings, along with empirical data interpretation, description and comparison yielded results pointing to very poor performance of the insurance sector as a whole, because in all years of the observed period the relative average efficiency (technical, pure technical and scale efficiency) was below 100%, especially in the period 2015-2018.

FOREIGN METHODS FOR ASSESSING THE FINANCIAL STABILITY OF A COMMERCIAL BANK

2021 ◽  
Vol 6 (6) ◽  
pp. 534-539
Author(s):  
Gyulzar Akhmedullakhovna Gulmagomedova ◽  
Luiza Shakhpazovna Mirzoeva
Keyword(s):  
Commercial Bank ◽  
Financial Stability

scholarly journals Mechanisms of Protection from Interest Rate Risk with Reference to the Life Insurance Market in Montenegro

2018 ◽  
Vol 7 (1) ◽  
pp. 17-42
Author(s):  
Milijana Novović Burić ◽  
Vladimir Kašćelan ◽  
Milivoje Radović ◽  
Ana Lalević Filipović
Keyword(s):  
Risk Management ◽  
Interest Rate ◽  
Life Insurance ◽  
Financial Management ◽  
Financial Stability ◽  
Interest Rate Risk ◽  
Economic Security ◽  
Insurance Market ◽  
Insurance Companies ◽  
Rate Risk

Abstract Insurance companies are facing major challenges that point to the need for control process and risk management. Risk management in insurance has a direct impact on solvency, economic security, and overall financial stability of insurance companies. It is very important for insurance companies to adequately calculate risks to which they are exposed. Asset liability management (ALM), as an integrated approach to financial management, requires simultaneous decision-making about categories and values of assets and liabilities in order to establish the optimum volume and the ratio of assets and liabilities, with the understanding of complexity of the financial market in which financial institutions operate. ALM focuses on a significant number of risks, whereby the emphasis in this paper will be on interest rate risk which indicates potential losses that may reflect in a lower interest margin, a lower value of assets or both, in terms of changes in interest rates. In the above context, the aim of this paper is to show how to protect from interest rate changes and how these changes influence the insurance market in Montenegro, both from the theoretical and the practical point of view. The authors consider this to be an interesting and very important topic, especially because the life insurance market in Montenegro is underdeveloped and subject to fluctuations. Also, taking into account the fact that Montenegro is a country that has been making serious efforts to join the EU, it is expected that insurance companies in Montenegro will strengthen their financial position in the market even using the ALM traditional techniques, which is shown in this paper.

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