Banking. Financial areas of banking management. Comprehensive management of bank liabilities and assets (the most important)

Lecture notes, cheat sheets
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Banking. Financial areas of banking management. Comprehensive management of bank liabilities and assets (the most important)

Lecture notes, cheat sheets

Directory / Lecture notes, cheat sheets

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Topic 55. Financial areas of banking management. Comprehensive management of liabilities and assets of the bank

Financial areas of banking management: 1. Banking policy 2. Liability management 3. Asset management 4. Liquidity management 5. Profit management.

1) Banking Policy (BP). The presence of a BP allows the design bureau not to blindly follow the existing economic situation, but to form an adequate response that makes it possible to make maximum use of the positive aspects and neutralize the negative ones (bank management).

The main questions to be answered by the BP are: - why (in the name of what) certain actions should be carried out; - what actions should be taken; - which structural units, specific employees should perform specific operations; - according to what schemes and scenarios operations should be carried out.

The structure of banking policy: credit policy, deposit policy, pricing, investment, risk policy, diversification policy, etc.

2) Liability management. The bank's objectives in managing liabilities:

1) prevent the attraction of resources that do not generate income. 2) Attract credit resources in quantity and quality sufficient to carry out active operations. 3) Seek and attract easily accessible resources 4) Conduct an analysis of resources of “dubious” origin and it is advisable not to attract them to the bank - this can lead to a decline in the bank’s image, drag it into criminal areas, risk operations and cause an outflow of clients.

Liability management is carried out in two directions: - quality management of a specific banking product, - portfolio management of banking products.

3) Asset management:

1) ensuring profitability. 2) maintaining liquidity. 3) ensuring the return of invested funds. 4) safety of the asset (neutralization of possible losses due to excessive risk of clients or due to changes in market conditions). 5) development of new territories, industries, social strata. 6) formation of a range of banking services.

4) Liquidity management - includes a set of actions and methods for managing an asset (A) and a liability (P). Maintaining liquidity is liquidity management. 5) Comprehensive management of A and P. Coordination of A and P on a number of key indicators: - in terms of timing, - in terms of cost, - in terms of interest rate sensitivity and environmental changes (interest rate risk is managed), - in terms of the formation of reserves against risks (credit risk and liquidity risk), - by business areas, social strata, territories.

Authors: Shevchuk D.A., Shevchuk V.A.

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