LIQUIDITY RISK MANAGEMENT AND ACCOUNTING OF RELATED OPERATIONS IN THE BANKING SYSTEM

Abstract

Risk management is the key of modern banks focused on market activity; it is represented by the management of the range of risks faced by the banking system. Banks must permanently maintain an appropriate degree of liquidity, for maintaining credibility with customers and the banking system. Sometimes, In their current activities, credit institutions are dealing with liquidity risk. In the situation where the risk of liquidity is manifested, to quickly procure liquidity, credit institutions can use several solutions. Compared to other banking risks (operational risk, the interest rate, currency risk, country risk), the liquidity risk is a common aspect of bank management, only in extreme cases generating insolvency problems.

Keywords

• liquidity risk
• credit
• performance
• banking management
• accounting