The Problem of Ensuring an Efficient Regulation of the Banks’ Liquidity in Current Conditions
The importance of liquidity in the current conditions of functioning and development of financial markets, the growth of global banking competition and the need to maintain stability of the entire banking sector of the country are characterized. The factors that contributed to the development of the...
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| Format: | Article |
| Language: | English |
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Research Centre of Industrial Problems of Development of NAS of Ukraine
2020-02-01
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| Series: | Bìznes Inform |
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| Online Access: | https://www.business-inform.net/export_pdf/business-inform-2020-2_0-pages-350_357.pdf |
| Summary: | The importance of liquidity in the current conditions of functioning and development of financial markets, the growth of global banking competition and the need to maintain stability of the entire banking sector of the country are characterized. The factors that contributed to the development of the global process of liquidity regulation of banking activities and ensured the formation of modern approaches to understanding its essence are allocated. The main views of scholars on the characterization of the concept of «liquidity regulation» are considered, as well as the definition of this concept from the position of two levels of banking activity: micro-level (liquidity of a separate banking institution) and macro-level (liquidity of the banking system) is suggested. Three main objectives of the banks’ liquidity regulation are allocated: 1) reducing the impact of uncertainty on the bank’s risk profile; 2) creating a liquidity buffer; 3) mitigation of systemic characteristics of the liquidity crisis. It is proved that in today’s operating environment, when building an effective process of regulating the liquidity of banks, it is necessary to take into account the course of financial cycles, on the basis of which the weighted regulatory instruments are determined. The importance of moving from the pro-cyclical to the countercyclical regulation in order to prepare the system for possible future liquidity fluctuations is emphasized. |
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| ISSN: | 2222-4459 2311-116X |