All About Liquidity Management In Banks
liquidity management in banks refers to the processes and strategies that financial institutions, including banks, use to ensure that they have sufficient liquidity or the ability to meet their financial obligations as they come due. This includes managing the balance between short-term and long-term funding, as well as managing the bank's assets and liabilities to ensure that the bank has the necessary cash to meet its financial commitments. There are several key components to liquidity management in banks: Cash management: Banks need enough cash to meet the daily demand for withdrawals and other transactions. This requires forecasting cash flows and ensuring sufficient cash is in the bank's vaults and ATMs. Funding management: Banks need to ensure that they have a sufficient mix of short-term and long-term funding sources to meet their financial obligations. This includes managing the bank's deposits and access to other sources of funding, such as wholesale funding and t...