Banking management in the prism liquidity – profitability interrelation

Valentin Pauna, Amelia Diaconu, Svetlana PLATAGEA Gombos and Raluca Iuliana Georgescu
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Valentin Pauna: Bucharest University of Economic Studies, Romania
Amelia Diaconu: Artifex University, Romania
Svetlana PLATAGEA Gombos: Bucharest University of Economic Studies, Romania
Raluca Iuliana Georgescu: Bucharest University of Economic Studies, Romania

Theoretical and Applied Economics, 2022, vol. XXIX, issue 1(630), Spring, 93-100

Abstract: Within a banking company, an important task is to estimate and cover the liquidity needs of the bank. In fact, achieving and maintaining this goal requires real art, as a low level of liquidity leads to significant cash reductions and the need to attract additional resources at high cost, resulting in a decrease in bank profits and excessive liquidity. The return on assets decreases, resulting in poor financial performance. Within a banking company, the most important banking activity is the attraction of money on the market in order to grant loans, thus aiming to obtain as much profit as possible. Any banking activity is accompanied by risks. These risks have negative effects on the bank's activities, such as: deterioration in business quality, impairment of the bank's functionality, decrease in profit, loss, entry into insolvency, bankruptcy.

Keywords: bank; liquidity; management; profitability; risk. (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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