The paper provides a survey of the methods that can be applied to assess liquidity of banks and the banking system. There are three reasons for systematizing those methods. First, liquidity risk has recently started to exert a significant influence on the banking system and indirectly on the whole economy. Second, there are many different concepts of liquidity in the literature, which are connected with the liquidity of banks. Third, liquidity is becoming a very profound field of scientific research which is helpful in understanding sources of liquidity surplus and drying-up of liquidity. In the survey, we summarized the results of the research on the efficient methods of measuring and assessing liquidity in banks and in the banking system. We concentrated on practical solutions, including those which need improvements. We also presented the open questions regarding application of the very recent results of the research on liquidity, i.e. liquidity at risk, liquidity stress-testing and systemic liquidity.

Keywords: liquidity of banks, liquidity analysis and assessment, stress tests, systemic risk
JEL: G10; G21

  Grzegorz Hałaj - Review of Methods for Liquidity Analysis of Banks - plik pdf; (260 KB)