Analysis On Excess Liquidity Of J Bank

The Index of loan-to-deposit ratio of J bank is far below the regulatory level ofthe central bank. According to this situation, the article puts forwrd the issues thatexcess liquidity has becoming the difficult problem faced by China’s commercialbanks, Firstly, the article reviews the literature concerning with the deposit gap andthe excess liquidity of commercial banks. And analysis the definition related to theexcess liquidity. The conclusion has been made that the problem of excess of liquidityhas been existed in J bank by describing the performance of the liquidity index. Thenthe article discusses the impact of J banks’ operation influenced by the excessliquidity. At the basis of the above analysis, the article concludes the reasons for theexcess liquidity of J banks. Foreign exchange position、economics of inequality、imperfect social security system、 high household savings、 the declining ofrequirement of cash and the credit control of risk management of commercial banks.At last the article suggests the solutions to the excess of liquidity from macrocosmicand microcosmic background based on the lessons of Japanese commercial bankscontrolling the excess liquidity.