Current liquidity as an indicator of the effectiveness of solvency management

Management of liquidity and solvency of the bank is theoretically based on many different theories: the theory of loans, transfers, expected income and others. All of them have their advantages and disadvantages and in their pure form do not meet the requirements of practice. However, by synthesizing separate theoretical aspects, banks create their own concept of liquidity management that best meets the requirements of their activities, and successfully apply it.

At the present stage, the choice of the liquidity management concepts used in banking is determined by two approaches: the bank must either always have sufficient liquid assets in its stock or have the ability to attract liquid funds at any time in the financial market. In the economic literature, this alternative is expressed in the division of bank liquidity into liquidity- "stock" (stationary liquidity) and liquidity-the "flow" (current liquidity). The first one describes the liquidity of the bank's balance sheet at a particular point in time, the willingness to meet all current obligations on the basis of available liquid funds. Current liquidity shows the possibility of turning less liquid assets into more liquid ones, which, together with ensuring minimum liquidity reserves , allows for more efficient management of emerging situations.

This approach to the consideration of liquidity determines the content of the current liquidity management strategies, the main ones of which are: asset management strategies , liabilities, assets and liabilities.

The first is the accumulation of liquidity in the form of money by the bank. The application of this strategy is predetermined by the presence in the country of developed financial markets with a stable price level and the ability to recover initial investment with the least risk. The liability management strategy is based on a loan of payment means when the current liquidity is low. The third strategy that best meets the requirements of modern practice. It assumes that the current liquidity is maintained to the extent that they are needed to cover current requirements, and, if necessary, actively attract them to the market.

Current liquidity, despite all the above strategies and methods, is in practice provided at a quite acceptable level, and the management strategies themselves prove to be sufficiently effective and are widely used by modern banks in the liquidity management process. However, the presence of a number of inherent conditions for their successful application does not give the bank full confidence in the safety of its activities. These methods of resource management are characterized by a low level of accuracy, which leads to a loss of a significant part of the potential profit and a situation where the current liquidity is reduced. In this case, they can only be used to resolve the situation that has already arisen. However, an effective way to preserve the bank's liquidity is to forecast possible escalation of negative circumstances with a view to taking proactive measures. Therefore, it is important at this stage to consider the practical manifestation of bank liquidity also as liquidity-the "forecast".

Liquidity - "forecast" is characterized by the definition of possible scenarios for the development of the situation in the liquidity of the bank in the emerging conditions and the adoption of a number of timely measures in order to maximize the benefit from the current situation. The methodology of liquidity management in this approach is based on the method of mathematical modeling of dynamic processes with the optimization of specific indicators. These methods allow to increase the effectiveness of management decisions and provide the necessary level of security.