The major aims of the study were to find empirical evidence of the degree to which effective liquidity management affects profitability in commercial banks and how commercial banks can enhance their liquidity and profitability positions. Considering the nature of the survey, quantitative methods of research were applied. In attempt to achieve the objectives of the study, several findings were made through the analysis of both the structured and unstructured questionnaire on the management of banks and the financial reports of the sampled banks. The data obtained from the Primary and Secondary sources were analyzed through collection, sorting and grouping of the data in tables of percentages and frequency distribution.
The paper approaches risk management from three perspectives: (1) risk measurement by individual firms, (2) governance and incentives, and (3) systemic concerns. The paper evaluates each approach separately and also discusses the importance of considering them as interrelated. Division of Economic and Risk Analysis 1 Liquidity and Flows of U.S. Mutual Funds Paul Hanouna, Jon Novak, Tim Riley, Christof Stahel1 September 1. Summary We examine the U.S. mutual fund industry with particular attention paid to fund flows, the liquidity of fund portfolios, and the interaction of those characteristics. Liquidity at a bank is a measure of its ability to readily find the cash it may need to meet demands upon it. Liquidity can come from direct cash holdings in currency or on.
Risk Principles in the Global Financial Crisis……………………………………… Introduction The global financial markets succumbed to significant fear following the downfall of the Lehman Brothers in The resultant impact was evident.
The collapse paralysed the lending system of banks since they could no longer issue credit funds to one another. Trade credit for manufacturing products and investment commodities stopped.
The occurrence of the events resulted in the suppression of the global economic activity. It is evident that the GFC caused a major economic recession in the majority of the developed economies.
The decision of governments to ease the fiscal and monetary policy was a response to the crisis. The states wanted to reduce the trend of the rapidly declining trade volumes since it impacted negatively on the global economy.
The unemployment rate rose sharply following the decline in the trading activity.
The battle towards a stabilised economy compelled governments to protect their domestic economies and prevent the further deterioration of trading activities.
The essay contains six parts. The first part discusses the risk principles in the GFC. Secondly, the essay analyses three case studies that triggered the onset of the crisis.
The third part constitutes an analysis of the role of financial engineering in the emergence of the GFC. It focuses on the use of derivative type products, collateralised debt products and contracts for differences in the crisis.
The fourth part discusses the interconnectivity between operational risk, liquidity risk, credit risk and systemic risk.
Moreover, the essay discusses the role of governance and non-regulatory compliance in risk management. Finally, the essay provides the ISOLiquidity Risk Risk Management Systems for the Insurance Industry - Market Update This report updates the Chartis report Solvency II Technology Solutions , focussing on risk management systems for the insurance industry.
Liquidity risk consists of Funding Risk, Time Risk & Call Risk. b) Interest Rate Risk Interest Rate Risk is the potential negative impact on the Net Interest Income and it refers to the. We examine the risk-return characteristics of a rolling portfolio investment strategy where more than six thousand Nasdaq initial public offering (IPO) stocks are bought and held for up to five years.
The average long-run portfolio return is low, but IPO stocks appear as longshots, as five-year buy. The endogenous evolution of liquidity risk is a key driver of financial crises.
This paper models liquidity feedbacks in a quantitative model of systemic risk. The model incorporates a number of channels important in the current financial crisis. As banks lose access to longer-term funding markets. The following liquidity risk research papers research is not investment list of reliable sources for research papers advice Research paper topics sugestions and is intended for use by financial examples of discussion in research papers professionals for educational purposes english research paper rubric high school only.
A decline in market liquidity poses several challenges for central banks with ample reserves, heightening the importance of strategic asset allocation, dynamic rebalancing across liquidity and investment tranches and the effective management of liquidity risk.