Bank Liquidity Management at the Macro and Micro Levels
Lavreniuk V. V., Zhuravlev O. S.

Lavreniuk, Vladyslav V., and Zhuravlev, Oleg S. (2023) “Bank Liquidity Management at the Macro and Micro Levels.” The Problems of Economy 2:213–223.
https://doi.org/10.32983/2222-0712-2023-2-213-223

Section: Finance and banking

UDC 336.71.025.12:005.334

Abstract:
The article is aimed at deepening and systematizing the theoretical and methodological foundations of liquidity management at the macro and micro levels. The state of liquidity of the banking system of Ukraine during the war period is analyzed and the shortcomings of the practice of liquidity management of banks at the macro and micro levels are allocated. It is found that, despite a sufficient level of liquidity of domestic banks and moderate systemic liquidity risk, banks have problems with a fixed-term deposit structure, a significant liquidity surplus, increased funding costs and increased competition for business funds. The theoretical and methodological foundations of liquidity management at different levels are systematized and supplemented, taking into account the actual problems of liquidity management of domestic banks. Two structural and logical schemes of liquidity management of the bank at the micro and macro levels have been built, which contain conceptual foundations for building liquidity management (principles, methods, instruments, communication) and take into account modern regulatory requirements (central bank, Basel committee). At the micro level, the process of liquidity management and liquidity risk management is differentiated, taking into account the channels of interaction, specific methods and instruments. Methods and instrumentarium for liquidity risk management in the process of bank liquidity management have been expanded. A universal, step-by-step algorithm of liquidity management process at the micro level is proposed. The instrumentarium of liquidity monitoring at the bank level is systematized, taking into account modern practice. The conceptual foundations of liquidity management at the macro level have been supplemented, in particular: 1) management instruments have been supplemented by the indicative ones; 2) the principles have been expanded, synergy, behaviorality, controllability have been added; 3) the functions and objectives of management are adjusted taking into account crisis factors. Emphasis is placed on proper inter-level communication and coherence of strategies, policies, methodologies and procedures for managing liquidity of banks. It is determined that the regulator at the macro level should form an appropriate atmosphere for effective liquidity management at the micro level, and banks should take a responsible (taking into account system-wide goals) approach to the liquidity management. Prospects for further research in this direction are: 1) analysis of the impact of technological innovations on the process of liquidity management at the macro and micro levels; 2) study of the global context, namely the impact of systemic shocks of different jurisdictions on the liquidity of the domestic banking system.

Keywords: commercial bank, central bank, liquidity of the banking system, liquidity norms, liquidity risk, financial stability.

Fig.: 7. Bibl.: 14.

Lavreniuk Vladyslav V. – Candidate of Sciences (Economics), Associate Professor, Associate Professor, Department of Banking and Insurance, Kyiv National Economic University named after Vadym Hetman (54/1 Beresteiskyi Ave., Kyiv, 03057, Ukraine)
Email: lavrenkneu@ukr.net
Zhuravlev Oleg S. – Candidate of Sciences (Economics), Corporate Governance Professional Association (CGPA) (23 Volodymyrska Str., Kyiv, 01001, Ukraine)
Email: zhuravlevoleg@gmail.com

List of references in article

Keynes, J. M. “The Psychological and Business Incentives to Liquidity“. In The General Theory of Employment, Interest, and Money, 171-184. : Cham, 2018. DOI: 10.1007/978-3-319-70344-2_15
Sinkey, J. F. Commercial bank financial management in the financial-services industry. NJ: Prentice Hall, 2002.
Managing Liquidity in Banks: A Top Down Approach. Hoboken, NJ: John Wiley & Sons, Inc., 2012. DOI: 10.1002/9781119206415
Prymostka, L. O. et al. “Upravlinnia bankivskymy ryzykamy“ [Banking Risk Management]. Kyiv : KNEU, 2018. https://bit.ly/3PzqNDB
Dziubliuk, O., and Rudan, V. Upravlinnia likvidnistiu bankivskoi systemy Ukrainy [Liquidity Management of the Banking System of Ukraine]. Ternopil: Vektor, 2016.
Khrystoforova, O. M., and Minasian, M. T. “Likvidnist bankivskoi systemy ta praktychni aspekty yii zabezpechennia v suchasnykh umovakh Ukrainy“ [Liquidity of the Banking System and Practical Aspects of its Provision in Modern Conditions of Ukraine]. Naukovyi visnyk Khersonskoho derzhavnoho universytetu, no. 36 (2019): 109-114. DOI: 10.32999/ksu2307-8030/2019-36-20
Hirniak, V. V., and Putkivskyi, T. A. “Upravlinnia likvidnistiu bankiv za umov ekonomichnoi nestabilnosti (na prykladi AT «Oshchadbank»)“ [Bank Liquidity Management Under Conditions of Economic Instability (On the Example of Oshchadbank JSC)]. Hlobalni ta natsionalni problemy ekonomiky. 2018. http://global-national.in.ua/archive/22-2018/144.pdf
Shyiko, V. I. “Otsiniuvannia upravlinnia likvidnistiu bankivskykh ustanov“ [Assessment of Liquidity Management of Banking Institutions]. Investytsii: praktyka ta dosvid. 2018. http://www.investplan.com.ua/pdf/12_2018/15.pdf
Korobchuk, T. “Suchasni pidkhody do analizu likvidnosti komertsiinykh bankiv v Ukraini“ [Modern Approaches to the Analysis of Liquidity of Commercial Banks in Ukraine]. Ekonomichnyi forum, vol. 1, no. 3 (2022): 179-184. DOI: 10.36910/6775-2308-8559-2022-3-23
Kochetyhova, T. V., and Kozhukhar, D. S. “Zarubizhnyi dosvid upravlinnia likvidnistiu banku“ [Foreign Experience of Bank Liquidity Management]. Hlobalni ta natsionalni problemy ekonomiky. 2016. http://global-national.in.ua/archive/11-2016/149.pdf
“Ofitsiina nahliadova statystyka NBU“ [Official Supervisory Statistics of the NBU]. Natsionalnyi bank Ukrainy. https://bank.gov.ua/ua/statistic/supervision-statist
“Zvit pro finansovu stabilnist“ [Report on Financial Stability]. Natsionalnyi bank Ukrainy. https://bank.gov.ua/admin_uploads/article/FSR_2022-H2.pdf?v=4
Krasnova, I. V., and Hromnytska, I. Yu. “Protses rozhortannia kryzy likvidnosti bankivskoi systemy v tsyklichnykh umovakh“ [The Process of Deployment of Banking System’s Liquidity Crisis in Cyclical Conditions]. Biznes Inform. 2018. https://www.business-inform.net/export_pdf/business-inform-2018-5_0-pages-343_350.pdf
[Legal Act of Ukraine] (2018). https://zakon.rada.gov.ua/laws/show/v0064500-18#Text