The Importance of Liquidity for Commercial Banks
Banks are considered to be as safe deposit for customers associated with them for both short and long term basis. It has increased liability over banks to make sure that they are able to fulfill all the demands of the customers. Also several acts passed in many countries has reduced the dependency that commercial banks used to possess over Central Banks to make sure that their needs are sufficed in case some emergency arrives. Thus to maintain certain level of stake in the company, it is mandatory for commercial banks to retain appropriate liquidity ratios such that any ambiguous situation could be avoided.… Read the rest