Study On Liquidity Risk Measurement And Prevention Of Big Four Chinese State-owned Banks In Hong Kong

Since Basel III has been issued,banking regulatory agencies all over the world gradually attach importance to the management of liquidity risk.However,liquidity risk with more complex influences is different from other risks,which may be transformed from other risks.In the process of risk management of Chinese domestic commercial banks,as for the domestic institutions of China’s commercial banks,the head office centralizes deposited funds and manages asset-liability ratio within the whole province,the asset liability management department of the head office of major commercial banks has a complete set of management system.However,Overseas institutions generally face the situation of small scale of financial assets and serious shortage of post allocation.Moreover,compared with domestic institutions,the source of funds of overseas institutions is single,and the liquidity risk is easier to be triggered than domestic institutions.In the process of expanding the overseas market,Chinese—funded commercial banks are affected by the differences of liquidity risk indicators stipulated by the local supervision of overseas institutions.At present,the measurement of Chinese domestic liquidity risk is not fully applicable to overseas institutions,and the management approach of overseas institutions is not perfect.Nothing of any substance was achieved in studying liquidity risk management of overseas institutions of Chinese—funded commercial banks as well as the measurement of liquidity risk of overseas institutions of Chinese—funded commercial banks by qualitative and quantitative methods.Most of the existing studies focus on the difficult point of liquidity risk management and the emphasis of liquidity review.Less research involves the assessment and prevention of liquidity risk between different countries and different Chinese—funded commercial banks.This paper first analyzed the research background of domestic and international operation of Chinese—funded commercial banks,and then introduced the definition of liquidity risk,the concept of liquidity risk identification and measurement,as well as the theory of risk management.Secondly,the asset scale of Hong Kong institutions of the four major state-owned banks,namely Industry and Commercial Bank of China(Asia),Bank of China(Hong Kong),Construction Bank of China(Asia)and Hong Kong Branch of Agriculture Bank of China,leads the way in overseas financial assets within the group and bears the lion’s share.It is of great significance to use the relevant data of financial index as specific data of research sample.At the same time,this paper analyzed the liquidity risk of the four state-owned banks on the Chinese mainland,and found out the liquidity risk characteristics,liquidity risk identification and measurement of the four major state-owned banks in Hong Kong.Qualitative and quantitative analysis was carried out by collecting the index data related with liquidity risk of four major state-owned banks in Hong Kong in recent ten years.The analysis showed that the liquidity risk of Industry and Commercial Bank of China(Asia)is at lower level,and the liquidity risk of the other three banks is at relatively higher level.According to the liquidity risk measurement of the Hong Kong institutions of the four major state-owned banks,although the main impact factor of the four banks are profitability factors,the proportion of each impact factor is quite different,which means that the business development of each bank has quite different emphases and different causes of liquidity risk.It is necessary for the overseas institutions of Chinese—funded commercial banks to measure and evaluate liquidity risk in combination with various business indicators according to their own asset liability strategic planning.Finally,control measures and suggestions were put forward,strategy of strengthening liquidity risk management and prevention was proposed based on their respective liquidity risk differences in combination with the characteristics of the Hong Kong institutions of the four major state-owned banks.Meanwhile,overall suggestions were proposed to strengthen the liquidity risk management of the overseas institutions of Chinese—funded commercial banks according to their common liquidity risk problems.