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Banking management in the prism liquidity – profitability interrelation

Author

Listed:
  • Valentin PAUNA

    (Bucharest University of Economic Studies, Romania)

  • Amelia DIACONU

    (Artifex University, Romania)

  • Svetlana PLATAGEA GOMBOS

    (Bucharest University of Economic Studies, Romania)

  • Raluca Iuliana GEORGESCU

    (Bucharest University of Economic Studies, Romania)

Abstract

Within a banking company, an important task is to estimate and cover the liquidity needs of the bank. In fact, achieving and maintaining this goal requires real art, as a low level of liquidity leads to significant cash reductions and the need to attract additional resources at high cost, resulting in a decrease in bank profits and excessive liquidity. The return on assets decreases, resulting in poor financial performance. Within a banking company, the most important banking activity is the attraction of money on the market in order to grant loans, thus aiming to obtain as much profit as possible. Any banking activity is accompanied by risks. These risks have negative effects on the bank's activities, such as: deterioration in business quality, impairment of the bank's functionality, decrease in profit, loss, entry into insolvency, bankruptcy.

Suggested Citation

  • Valentin PAUNA & Amelia DIACONU & Svetlana PLATAGEA GOMBOS & Raluca Iuliana GEORGESCU, 2022. "Banking management in the prism liquidity – profitability interrelation," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(630), S), pages 93-100, Spring.
    • Handle: RePEc:agr:journl:v:1(630):y:2022:i:1(630):p:93-100
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    References listed on IDEAS

    as
    1. Panayiotis C. Andreou & Dennis Philip & Peter Robejsek, 2016. "Bank Liquidity Creation and Risk-Taking: Does Managerial Ability Matter?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 43(1-2), pages 226-259, January.
    2. Muhammad Haseeb & Hafezali Iqbal Hussain & Sebastian Kot & Armenia Androniceanu & Kittisak Jermsittiparsert, 2019. "Role of Social and Technological Challenges in Achieving a Sustainable Competitive Advantage and Sustainable Business Performance," Sustainability, MDPI, vol. 11(14), pages 1-23, July.
    3. Fiordelisi, Franco & Minnucci, Federica & Previati, Daniele & Ricci, Ornella, 2020. "Bail-in regulation and stock market reaction," Economics Letters, Elsevier, vol. 186(C).
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    Cited by:

    1. Dumitru Alexandru BODISLAV & Florina BRAN & Cristina DIMA & Mihai DINU & Radu Florin CHIOTAN, 2023. "On The Verge Of A New Systemic Crisis €“ How Did We Get Here?," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 17(1), pages 168-174, November.
    2. Florina BRAN & Dumitru Alexandru BODISLAV & Ioan GAF DEAC & Florin UTA, 2023. "Business Ethics And Cautionary Integrity," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 17(1), pages 747-756, November.

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