The Analytical-Practical Instrumentarium for Assessing and Forecasting the Liquidity of Banking Institutions

Abstract

The article is concerned with development of a complex of economic-mathematical methods and models for assessing and forecasting the level of liquidity of banks. In order to achieve this objective, a cluster analysis of the banks of Ukraine by the liquidity level has been carried out; a correlation analysis has been applied to identify the factors that impact the level of bank liquidity the most; with use of the correlative regression analysis techniques the model of dependence of bank’s liquidity from the adequacy of capital and the ratio of credits to deposits, dynamic models for forecasting assets and the bank’s lending volumes have been built. As a result of applying these methods and the models built, a forecast of assets and bank lending volumes has been completed, and the liquidity forecasting values have been calculated. Based on the forecast, the bank can make decisions whether it is feasible to implement certain measures to improve its liquidity and, ultimately, to ensure its financial sustainability and stability.

Keywords

• bank
• liquidity
• liquidity standards
• forecasting
• model
• correlation-regression analysis
• cluster analysis
• asset dynamics