Application study on the stress test of liquidity risk management of city commercial banks in our country

Abstract

In recent years, with the development of capital market and the enhancing of risk correlation, liquidity risk looms large and has become a comprehensive risk with destructive force in the highly leveraged capital market. Duo to the small scale, non-diversified service range of city commercial banks and restrained by technical conditions and human resource, their ability to manage liquidity risk remains to be further improved. Stress test of liquidity risk, as a highly effective management tool, is conducive for city commercial banks to preventing potential liquidity risk and improving their ability to withstand liquidity risk. This paper takes certain city commercial bank in Northeast China as an example and gives a cause analysis of its liquidity risk; selects stress indicators and stress-bearing indicators rationally to build a stress conduction model to evaluate the potential liquidity risk it carries and accordingly put forward corresponding countermeasures and suggestions.