Science – Future of Lithuania / Mokslas – Lietuvos Ateitis, Vol 6, No 1 (2014)

Liquidity Risk and its Management in Lithuanian Banking System

Erika Bareikaitė (Vilnius Gediminas Technical University, Lithuania)
Raimonda Martinkutė-Kaulienė (Vilnius Gediminas Technical University, Lithuania)

Abstract


Banks are the main part of financial sector in each economy and strength of banking system becomes vital for ensuringfavourable economic stability and growth. Recent failure of two commercial banks in Lithuania showed that managershaven’t evaluated liquidity risk or haven’t dealt with it properly. The tasks of the paper are to investigate Lithuanian banksposition towards liquidity risk, analyse what kind of management tools banks use for ensuring favourable position towardsliquidity and to explore the liquidity influence to profitability in Lithuanian banking sector. The article examines liquidity andits management processes in Lithuanian banking sector. Description of liquidity importance is presented. Liquidity risk and itsmeasurement as well as the ways of managing the above mentioned risk is analysed in the article. In order to analyse the relationshipbetween liquidity risk and profitability of banks, analysis of scientific literature, research synthesis and generalizationshave been made.

Article in: English

Article published: 2014-02-20

Keyword(s): liquidity, liquidity risk, bank’s liquidity management, liquidity ratios, Lithuanian banking system.

DOI: 10.3846/mla.2014.09

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Science – Future of Lithuania / Mokslas – Lietuvos Ateitis ISSN 2029-2341, eISSN 2029-2252
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 License.