USE OF DYNAMIC INDICATOR MODELS FOR ASSESSING BANK LIQUIDITY

Abstract

The article determines that the existence of different approaches to the interpretation of the category of «liquidity» causes not only terminological, but also practical difficulties in their use. Most of the works on this issue are devoted to theoretical aspects of liquidity, external and internal analysis of a credit institution in terms of liquidity ratios, as well as to the research of the dynamics of mandatory liquidity ratios, which tend to change in the calculation methodology. While researchng the issue of compliance with the required level of bank liquidity, scholars and practitioners often draw attention to the importance of ensuring the solvency of a financial institution as a necessary component. At the same time, the analysis based on the public web application Google Trends proved the relevance of this issue. Taking into consideration the existing scholarship on the categories of liquidity and solvency, it can be argued that they are interdependent and interrelated, but liquidity is a broader category than solvency. It is noted that the higher the level of liquidity of the bank, the higher the level of its solvency. These indicators are main characteristics of the financial condition of the credit institution. The relevance of this issue is confirmed by Google Trends data, which shows that over the past five years, the number of Google searches for the topic «liquidity» has been higher than for the topics «solvency» and «financial stability». It has been proved that one of the main tasks for ensuring the required level of bank liquidity is determining the directions for optimizing indicators. This will minimize liquidity risks and ensure quick conversion of the bank’s assets into cash without significant price losses or the need to attract additional resources to fulfill obligations. It has been identified that the degree of speed of transformation of assets into cash indicates the level of liquidity of a banking institution. In this paper, a model of a dynamic indicator based on the matrix method is used to calculate liquidity risk. The calculations made it possible to find out the need to increase liquid assets and revise the bank’s credit policy.