TAILIEUCHUNG - Measures to improve liquidity management in Vietnam's commercial banks

The development of financial markets has entailed a corresponding rise in chances and risks of liquidity management. This presents the importance of estimating liquidity demand by means of enduring and low-cost approaches in order to sponsor banking operations in the increasingly competitive climate. | RESEARCHES & DISCUSSIONS Liquidity and liquidity risk management are vital for safe operations of any commercial banks. Many of them are now facing liquidity strains and forced to seek alternative financial support due to intense competition for deposits. Unbalanced liquidity is the first sign of financial instability. The development of financial markets has entailed a corresponding rise in chances and risks of liquidity management. This presents the importance of estimating liquidity demand by means of enduring and low-cost approaches in order to sponsor banking operations in the increasingly competitive climate. Keywords: liquidity, risk, management, assets, liabilities. 1. Facts of liquidity in Vietnam’s commercial banks Liquidity is the possibility of accessing assets or capital available for paying with reasonable costs on capital’s demand. High-liquidity capital is capital which takes low mobilization costs and quick mobilization time. High-liquidity assets are ones with low costs of converting into cash and quick ability to do so. Liquidity risks: risks occur when a bank fails to make payments or to convert its assets into cash or is unable to get loans. One of the most important tasks of every com- 20 Economic Development Review - June 2011 mercial bank is to maintain sufficient liquidity. That is, it must satisfy one of the requirements: (1) having disposable capital at hand, (2) having easy access to loans with low costs and in time, and (3) being able to quickly convert assets into cash to support business. The . banking crisis of 2008 has proved that liquidity deficit usually signals a bank’s severe financial problems. In fact, the bank will gradually lose its current depositors due to a growing urge to withdraw money and fail to attract more accounts due to customers’ reservations. Some are resigned to supplying loans when the lending rates are lower than the borrowing ones, therefore reducing their profits. * University of Economics - .

• Ngân hàng - Tín dụng
• Liquidity risk management
• Vietnams commercial banks
• Financial markets
• Corresponding rise
• Liquidity demand
• Matter of cash flow
• Balance sheet and income statement
• Cash flow strains
• Construction of a maturity ladder
• Financial institutions management
• Foreign exchange risk
• Sovereign risk
• Liquidity management
• Capital adequacy
• Product diversification
• Geographic expansion
• Policy Recommendations
• Management Function
• Technological Infrastructure
• Risk Limits
• Financial Risks
• ROE breakdown
• financial futures
• rate risk
• liquidity risk
• simulation model
• credit risk
• Financial system
• Commercial banking
• Financial institutions
• Risk management
• economic research
• Angiogenic Factors
• Local Immune
• Mechanisms Involved
• Formation of Endometriotic
• Endometriotic Lesions
• Corporate liquidity holdings
• Firm size
• Return on assets
• Corporate liquidity demand
• Influence corporate liquidity holdings
• Principles of economics
• Lecture Principles of economics
• Aggregate demand
• Theory of liquidity preference
• Liquidity preference
• Money market
• Lecture Money Banking and Finance
• Bài giảng Tiền tệ ngân hàng
• Keynes’ Demand for Money
• Demand for Money
• All or Nothing Theory
• The Liquidity Trap