Liquidity management as bank’s financial security component

Serhieieva Olena
PhD (Economics), Associate Professor, Department of Banking, Odesa National University of Economics, Odesa, E-mail:lenasergeeva2007@ukr.net, ORCID ID: https://orcid.org/0000-0002-5523-3894

Yavorskyi Vadim
Master’s student of Faculty of Finance and Banking EP «Management of Banks’ Activity on Financial Market», Odesa National University of Economics, Odesa, E-mail:vadimqqw112@gmail.com, ORCID ID:

Cite this article:

Serhieieva O., Yavorskyi V. (2024) Liquidity management as bank’s financial security component. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Upravlinnia likvidnistiu yak skladova finansovoi bezpeky banku; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 1-2 (314-315), pp. 70-76.

Abstract

Introduction. Effective management of bank liquidity is critical at the macro level in order to maintain the stability of the payment system and the resilience of the banking system. The problems of maintaining liquidity at the micro level are also among the top priorities in bank management. Their relevance is due to the significant impact of the bank’s liquidity on its financial security and image, since the bank’s ability to timely fulfill obligations and provide new loans is of the primary importance for customers, counterparties and depositors. The conducted analysis of liquidity management research proved that the actual issue is the justification of the proposal as to determining the internal determinants of the liquidity buffer brought to the level of algorithms and the possibility of being used by the banks of Ukraine in the process of analyzing liquidity as a component of banks’ financial security to initiate effective management decisions.Summarizing the results of the study, the authors highlighted the following requirements for indicators that should be taken into consideration while determining the determinants of the bank’s liquidity buffer: ambiguity, completeness of coverage, sufficiency, economic plausibility, availability and periodicity of information. An important element of the developed model is the determination of an independent variable, that will act as an indicator of the adequacy of the bank’s liquidity buffer. Using the results of the regression analysis of the internal determinants in the bank’s liquidity management system will allow banks to ensure the target level of liquidity buffers, which will contribute to reducing the overall liquidity level, increasing the financial security and stability of banks as a whole. The application of the developed scientific-methodical approach in the banks’ activity will allow a comprehensive assessment of the impact of internal determinants on the liquidity buffer which forms the basis for countering internal threats, using internal opportunities on an alternative basis with the provision of resources, and making appropriate management decisions; control and determination of the achievement of the goals of the implemented measures.

Keywords

bank, financial security, risk, liquidity, management.

JEL classification: G210; DOI: https://doi.org/10.32680/2409-9260-2024-1-2-314-315-70-76

UD classification: 336.717.18

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