Research Of Liquidity Risk In Commercial Banks

Liquidity risk is known as “the most lethal risk of commercial banks” for its stronguncertainty and great damage. In China, commercial banks’ liquidity risk management isbackward, if the macro environment changed, liquidity pressures will make thecommercial banks facing unprecedented liquidity crisis. As the world’s economicenvironment changes, China’s commercial banks will face more and more complexmacro and micro environment, liquidity risk will become more and more important.Therefore, the study of liquidity in commercial banks has a strong practical significance.This article study the liquidity risk by the idea of how to generate liquidity risk–howto measure–how to manage. First, we analyze the reason of liquidity risk by using D-Dmodel, and find that the liquidity risk comes from the bank itself. Then introduced themeasurement methods of commercial banks, and compare the risk level of China’scommercial banks. Next, we analyze the factor of China’s commercial banks’ liquidity risk.Finally, we draw lessons and learn from the financial crisis and the Basel Committee onliquidity risk management. At last, we give some advice on how to manage liquidity riskbased on the problem of liquidity risk in commercial banks of China.