Liquidity risk at commercial banks and factors affecting liquidity risk

Abstract

In the commercial banking industry, liquidity risk plays a crucial role in ensuring the stability and strength of the financial system. Understanding and managing liquidity risk is an indispensable part of the business strategy of every bank. This article will delve deeper into the concept of liquidity risk in commercial banks and the related factors, from the bank's internal elements to external factors that can impact this risk. By carefully analyzing and identifying these critical factors, we can gain a more comprehensive and effective understanding of how banks can respond to and mitigate liquidity risk in the current volatile business environment.