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Liquidity management strategies in the Czech banking sector

Author

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  • Jana Lastuvkova

    (Department of Finance, Faculty of Business and Economics, Mendel University in Brno)

Abstract

This paper focuses on the evaluation of the liquidity development in the banking sector of the Czech Republic. The evaluation is carried out using specific method of measurement - gross liquidity flows and their overall reallocation. This method allows determining liquidity for the banking sector as well as for the individual groups. The method is also based on liquidity flows, in addition in two forms - positive and negative, is thus the dynamic assessment of the liquidity in a perspective of its creation and outflow. This takes into account current trends in requirements for measuring and monitoring liquidity risk. Evaluation of the flows is supplemented by a correlation analysis to determine the main factors of the liquidity development. The results suggest that the studied groups of banks have different characteristics and are influenced by different factors. Medium-sized group of banks, standing between the two other groups, does not show a clear strategy of its own, but takes elements from the other two groups of banks.

Suggested Citation

  • Jana Lastuvkova, 2014. "Liquidity management strategies in the Czech banking sector," MENDELU Working Papers in Business and Economics 2014-47, Mendel University in Brno, Faculty of Business and Economics.
    • Handle: RePEc:men:wpaper:47_2014
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    References listed on IDEAS

    as
    1. Natacha Valla & Beatrice Saes-Escorbiac & Muriel Tiesset, 2008. "Bank liquidity and financial stability," IFC Bulletins chapters, in: Bank for International Settlements (ed.),The IFC's contributi2827, volume 28, pages 40-47, Bank for International Settlements.
    2. Horvath, Roman & Seidler, Jakub & Weill, Laurent, 2016. "How bank competition influences liquidity creation," Economic Modelling, Elsevier, vol. 52(PA), pages 155-161.
    3. Irina Bunda & Jean-Baptiste Desquilbet, 2008. "The bank liquidity smile across exchange rate regimes," International Economic Journal, Taylor & Francis Journals, vol. 22(3), pages 361-386.
    4. Moore, Winston, 2009. "How do financial crises affect commercial bank liquidity? Evidence from Latin America and the Caribbean," MPRA Paper 21473, University Library of Munich, Germany.
    5. repec:zbw:bofitp:2013_016 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Czech banking sector; measurement of the bank liquidity; liquidity flows; liquidity strategies;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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