Liquidity Risk Management: UK Banks - Essay Example

The recent dissertation is an attempt to find out the significant risks like liquidity that affect the banking sector performance in the UK. The outcomes will help the government and other participants in enhancing the performance of the banking management to control the liquidity involved.

The objective of the research 1. The effect of the bank stability, disclosure of the liquidity risks in critical economic strategies, and conditions to be applied in such circumstances. 2. To manage the liquidity risk in the UK banking sector. 3. To determine and find out the possible recommendations to reduce the risks 4. The impact of financial markets, economies, and the banking industry towards managing liquidity risks. 5. The significance of a governing framework within the banking industry regarding managing liquidity risks.

Literature review 1. Introduction to financial risks 2. Central tenet financial risk management 3. The application of financial risk management within the banking sector 4. Tool and techniques used in financial risk management 5. Liquidity risk metrics 6. Liquidity risks indicators 7. Drivers of liquidity risks within the banking sector 8. Strategies employed by the banking industry to manage liquidity risks 9. Assessing information from commercial sources will provide insight into the current and contemporary issues facing risk management within the banking industry. 10. Company reports 11.

Industry-specific publications Questions of research The study question will assist us to understand liquidity risk concepts that will be a benefit to the banking sector of the UK. 1. What is liquidity management? 2. The importance of liquidity management in baking. 3. Factors influencing liquidity risks. 4. How to fail to address liquidity risks contribute to systemic risk and financial contagion Research methodology The research seeks to examine risk management especially related to the management of liquidity risks within the banking sector.

The research will be contributed from secondary sources that will be taken from the annual report of the balance sheet and income statement from each bank from 2006 to 2011, as well as primary sources will be used and taken from journals and company publications. Furthermore, a number of hypotheses will be included in order to be used as a key finding, and this will several financial calculations related to the banking sector which is used to control liquidity) The liquidity ratio is funded for each bank by using the steps: 1) Capacity ratio net loans/total assets 2) Loan to deposit ratio= net loans/total assets 3) Reserve ratio= cash/customer deposit Data collection In order to accomplish the goals, the secondary data have to be identified in the most appTollection method.

Written data sources are mainly used in research projects which include archival research and written documents. Non-written documents are also used, but they are not used often because they are not thNon-written. Documents are also used in acquiring quality often. Data analysis Conducting a review of the literature (using the second data collection method mentioned) following the liquidity management of financial institutions. The role of the central bank's Regulatory bodies in Other financial and economic aspects towards liquidity risks.

Identifying the risk management policies Conclusions The financial sector has been pushed to the front in the wake of the world financial crisis, which this event gave implications for world economies. For this reason, banks, in particular, have been subject to close as the blame for the financial scramble has been placed squarely on these institutions. As a result of this, greater emphasis and interest are being placed on the ability to assess, manage, and moderate key risks, which the banking sector is liable to as a means of avoiding similar events in the prospect. Opinion, the proposed research will look to investigate an area that is currently of considerable interest to bankers, regulators, policymakers, and society at large given the essential role worked by the financial institutions in the United Kingdom.