INCIDENCE OF LIQUIDITY RISK IN BANKING ACTIVITY

Mariana Vlad

Annales Universitatis Apulensis Series Oeconomica, 2006, vol. 2, issue 8, 52

Abstract: Liquidity is necessary for banks to compensate for expected and unexpected balance sheet and fluctuations and to provide funds for growth. It represents a bank's ability to efficiently accommodate the redemptions of deposits and other liabilities and to cover funding increases in loan and investment portfolio. A bank has adequate liquidity potential when it can obtain needed funds promptly and at a reasonable cost.

Keywords: liquidity; bank; deposit; liability (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:alu:journl:v:2:y:2006:i:8:p:52

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