Factors Affecting the Liquidity of Commercial Banks

Abstract

The article discusses the factors affecting the liquidity of commercial banks. The liquidity of a bank depends not only on the internal but also on external factors, for example, the level of development of market relations in different segments of the economy, the activities of the Central Bank. Also, the rational allocation of resources in terms of profitability has a positive impact on the financial stability of banks, in particular, on liquidity. At the same time, the low quality of loans issued by banks, the increase in the volume of problem loans have a negative impact on bank liquidity. This, in turn, indicates that there are certain shortcomings in the bank's credit policy. In the management of the liquidity of a commercial bank, it is advisable to take effective measures to eliminate their negative effects, making them the object of constant monitoring.