Excess Liquidity and Commercial Banks Liquidity Risk Management

摘要

Excess liquidity is a significant characteristic of global macro economy in recent years. In this context, the liquidity management of commercial banks is facing new challenges. The commercial bank is more dependent on financial markets, including borrowing short-term funds in the money market and asset securitization. If the market has any sign of trouble it will affect the liquidity of commercial banks, and even trans form from the excess liquidity to the sudden lack of liquidity .With excess liquidity, the commercial banks hold more risky assets and have more high-risk customers, doubled the risk of liquidity. The Reasons of excess liquidity in macroeconomic is mainly in developed countries. Effective liquidity risk management of commercial banks need central banks, financial regulators and commercial banks work together.