Liquidity management and capital adequacy management in banking
The main objective of this study is to evaluate the relationship between capital adequacy, liquidity management, credit risk management and financial performance with a moderating role of bank ownership. The Basel Committee developed a comprehensive set of reform measures, known as Basel III, to strengthen regulations. , supervision and risk management of the banking sector. This chapter examines capital adequacy, liquidity and leverage ratios in the context of Basel II regulations in three parts. The first part is about capital. This study examines the effects of capital adequacy on liquidity risk management practices in Nigeria. The secondary time series data comes from the annual reports of the fifteen 15. 4. Adequacy C Management. The capital structure of banks is not the same as the capital structure of other non-monetary corporations. Capital structure is very important in banks. The solvency of the banks, the capital and the financial soundness of the banking sector are too important to be left to the decision of the sector itself. This suggests that as the study developed an adverse relationship in the liquidity risk management and financial returns of Sierra Leone and Kenyan commercial banks, this makes it more. Capital Adequacy Ratio - CAR: The capital adequacy ratio CAR is a measure of a bank's capital. It is expressed as a percentage of a bank's risk-weighted credit exposures. We examine the impact of Basel III liquidity requirements, such as the liquidity coverage ratio LCR, the net stable funding ratio NSFR and capital adequacy, on bank lending and financial stability, using data from commercial banks in developing countries, using estimates from the fixed effects panel. the results of risk management and financial performance are presented in. The results show that the return on assets was between −4.71. an average. 66. This implied that the majority of insurance companies in Kenya achieved positive returns. Liquidity risk is the risk arising from the lack of marketability of an investment that cannot be bought or sold quickly enough to avoid or minimize a loss. With liquidity risk, usually. We find that bank-specific factors, such as non-interest income, liquidity, cost efficiency, capital adequacy and bank stability, have a positive and significant impact on bank profitability. The financial-related performance and risk management of the banking sector currently requires research to focus on the tools for assessing risks encountered in capital management. Existing researchers pay little attention to the implementation of basic risk capital management and its effect on insolvency risk and financial risk. According to their model, active risk management can allow banks to hold less capital and invest more aggressively in risky and illiquid loans. In this article, we test how access to the loan sales market affects banks' capital structure and lending decisions. Hedging activities in the form of derivatives trading and swap activities.